I had used the wrong NI code for an employee so I have had to make a payment to HMRC outside of the normal payroll system (with a small interest penalty).
Can anyone advise how I incorporate this into my payroll liabilites entries please?
Eric
I hesitate to give you my answer because it is tricky to get this right. In principle, you have to delete the payslip with the wrong code and re-run it as an unscheduled payroll with the right code.. You will then be able to give your employee an amended payslip. This must match what you have paid the employee. You will need to check that the recalcualtion does match your payment. You need safety nets to do this in case you get it wrong. Make a backup of your Quickbooks file before you start. Then you will have the option to return Quickbooks to its present state. Delete the payslip. Correct the code for the employee. Re-run the pay calculation for that employee. Check that the NI figures match your expectation. If in doubt, restore from the backup. John
Wow John, you are not wrong it looks tricky. Shall I make it even trickier?
The employee no longer works for me and has not done so for almost a year and the wrong code was used consistently for over a year. I am prepared to write off the employees contribution, just to get this thing cleared off my "to do" list. It isn't a big some of money. Will the process you described still work? I am very nervous of trying to circumvent the right process, especially when faced with a screen that tells me my actions are not reversible...
Nervously yours
Eric
Hi Eric, I admit I would feel more comfortable if I could be in front of your screen while having this conversation. Also, I had assumed this was a current issue. Once you have run your payroll year end then it is too late to change the record in Quickbooks because the figures in Quickbooks are the figures in your year end return (The P35). That means that my suggestion will not work. At this stage you need the shortest route to as resolution. If writing off works for you then do that. However, you do need to tell HMRC what has happened because they may have some tasks for you to sort out the deductions/contributions for this employee. John
Hi John,
You have already been very helpful thank you. One final question, which account do you suggest that I post the payment into for the sake of historical records?
As for HMRC, they should close the file on this now and leave me in peace.
Again thank you for your help, if you even have a question in wireless intruder alarms, I am your man!!
Eric
Hi Eric,
This is a National Insurance payment to HMRC for employee's NI so it should be posted to the same account as other such payments. I assume this is "payroll liabilities". If you have a reason not to do it this way then create a new liability account and use that.
Thank you for the offer of help with alarms. Not a technology we use at home so I will pass on that. Glad I could help.
John
Sorry to [removed] in but this is wrong!
the wrong NI code was used so insuffient deductions have been made from the employee - as a result as the employer you are bearing the additional cost instead of recouping it from the employee.
If you post the payment to payroll liabilities then the total amount showing as due to HMRC will be incorrect.
You just need to write a cheque to payroll expenses (or whatever your wage expense on the P&L is called) - you can then post the interest on the same cheque to interest expense
