Staff expenses /payroll question

PaulaS

A member of staff (not a director) was asked to work extra hours, and therefore had to cancel his weekend trip. He therefore asked if the company would pay the cancellation fee he incurred. I wrote a cheque to him and posted it on Sage as an expense. My colleague said it should have gone through the payroll as it was a compensation payment. I can find nothing on the internet to say that the expense should have gone through the payroll.
Please could someone advise if I did the wrong thing.
Thanks

peaman

If you regard it as a personal expense which the company paid on the employees behalf, then PAYE and class 1 NIC should have been payable.

I only think of compensation payments to employees as part of redundancy packages, which is a different matter!