How to amend this payroll?

Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 🎆 🐘 🎆
I took on a new client in March this year. As discussed at the time with them, they want to pay themselves a salary to make use of their tax allowances, because their previous accountant did not include them (!!). So we have declared directors payment in March 2011.

However, the previous accountant filed the 2010-11 P35s with just employees on the payroll, not directors.

The directors ought to be putting "P60" figures on the employment pages of their personal tax returns (which they do themselves and yes, I've checked their other income and that salaries will be tax efficient). However, no P14s were filed for them with HMRC.

I've never sussed out the best way of amending a P35 once filed - write in? Re-file electronically?

(It's the end of the afternoon and my cynical brain is saying the chances are HMRC are unlikely to tally up the lack of a P60 on their system with a P60 on the personal tax return but that's beside the point)

Is there scope for declaring it as "other income" on their SATR as a "directors fee" and getting the P35 right for 2011-12? I've heard of instances where ad-hoc fees are not paid through payroll but declared separately on the SATRs. Not sure offhand exactly what criteria is required though.

Or is it a case of amending and, if so, re-file electronically or write to the tax office?



  • Guest
    Guest Registered Posts: 73 💫 🐯 💫
    If they cross LEL P14 required.
    I would re-file P35 online with new P14s and also write explaining the omission and then file SA100 showing new P14 figures.
    If your payroll software doesn’t allow online filing of amendments (ours - payroll manager doesn’t) you can use the HMRC filing, just showing the ‘movement’ in P35 figures.
    Alternative, keep salary below LEL and get P46s signed. No NI stamp though!
    Remember all PAYE returns need to be dealt with electronically so no amendments can be done via simply writing.
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