Help - SMP entries

Sarah-Lou
Sarah-Lou Registered Posts: 141 ? ? ?
Afternoon :)

I have searched the forums but can't find my answer (and the search kept crashing my machine!).

Can someone advise me of the entries on sage for SMP when HMRC have funded it. This is the first time I have done anything like this so please bear with me;

CR 2210 - Funds received from HMRC (DR Bank obviously)

Then paying the actually employee

DR 2210 CR 7000 Wages?

And the payment from HMRC for compensation?

DR 2210 the compensation amount
CR Misc income (not sure of code for that one at moment!)

Really appreciate any help or clarification

Sarah-Lou

Comments

  • coojee
    coojee Registered Posts: 794
    Sarah-Lou wrote: »
    Afternoon :)

    I have searched the forums but can't find my answer (and the search kept crashing my machine!).

    Can someone advise me of the entries on sage for SMP when HMRC have funded it. This is the first time I have done anything like this so please bear with me;

    CR 2210 - Funds received from HMRC (DR Bank obviously)

    Then paying the actually employee

    DR 2210 CR 7000 Wages?

    And the payment from HMRC for compensation?

    DR 2210 the compensation amount
    CR Misc income (not sure of code for that one at moment!)

    Really appreciate any help or clarification

    Sarah-Lou

    When you pay the employee won't the credit be to the bank? And I'd CR the compensation to PAYE costs as it's reimbursing you the NI on the SMP payment.
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 ? ? ?
    Hi coojee thank you for replying. I missed out the part of actually paying the person. When I meant paying the employee i actually was just putting the money into gross wages to pay them so (DR 7000 and CR Bank)


    CR 2210 - Funds received from HMRC (DR Bank obviously)

    Then paying the actually employee

    DR 2210 CR 7000 Wages?
    DR 7000 wages actual payment CR Bank

    And the payment from HMRC for compensation?

    DR 2210 the compensation amount
    CR Misc income (not sure of code for that one at moment!)

    I dont use a specific PAYE code so not sure where you are suggesting to credit it.

    Thank you :001_smile:
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    I always Cr the SMP offset and compensation to a sub-account of Wages

    Coojee, paying the employee is a Cr bank. Sarah said the Dr bank was HMRC paying the money ;-)

    If it will be offset against the Tax/NI bill then HMRC won't pay anything into the bank so it would be Dr HMRC Liability account.
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Hang on, those are Sage codes - the standard Sage COA has an account set up in the 7000 range for SMP :)
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 ? ? ?
    Hello Monsoon :)

    Thank you for your input too!

    CR 2210 - Funds received from HMRC (DR Bank obviously)

    Then paying the actually employee

    DR 2210 Take SMP payment from PAYE/NI and credit to..
    CR 7000 Wages

    DR 7000 wages
    CR Bank as payment to employee

    And the payment from HMRC for compensation?

    DR 2210 the compensation amount (Is this one right as taking it from here and sending to)
    CR Sage code for SMP comp

    Our accounts have to go to our external accountants and as they already think i'm useless i really don't want them to have leverage to moan about me even more. And of course this double entry wasn't covered in the NVQ2 AAT payroll course and not in the NVQ3 AAT payroll text book. All help very much appreciated :)
  • Monsoon
    Monsoon FMAAT, AAT Licensed Accountant Posts: 4,071 ? ? ?
    Hola :)

    I would probably do it like this:

    DR 7000 Gross Wages
    DR 7006 Employers NI
    CR 2210 PAYE liabilities
    CR 2220 Net Wages
    CR 7013(?) SMP reclaimed for both the compensation and the SMP offset against NI/TAX

    If the balance on 2210 ends up as a Debit, then HMRC will pay you and you DR the bank.
    If the balance on 2210 ends up as a Credit, then you owe HMRC the net of the total tax/ni less all the SMP gubbins

    :D
  • coojee
    coojee Registered Posts: 794
    Monsoon wrote: »

    Coojee, paying the employee is a Cr bank. Sarah said the Dr bank was HMRC paying the money ;-)

    That's what I said. When you pay the employee it will be a CR to the bank. I was refering to Sarah's comment of:

    "Then paying the actually employee

    DR 2210 CR 7000 Wages? "
  • Sarah-Lou
    Sarah-Lou Registered Posts: 141 ? ? ?
    sorry coojee I wasn't very clear with that. I was just asking if I needed to shift the money to gross wages so that I could then pay the employee which would of course be DR Gross wages 7000 CR bank :)
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