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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3811
Experience:  FCCA FCMA CGMA ACIS
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An employer has only 4 part-time employees (paid weekly) and

Customer Question

An employer has only 4 part-time employees (paid weekly) and the amounts due to HMRC for income tax and national insurance have been £500, £700 and £900 for the last three quarters. The highest paid employee has been on a BR tax code since week 1 but HMRC have now issued a code notice instructing the employer to now use code 811L. This will result in a tax refund of £1,000 to be paid to this employee next payday!! Is it OK to pay the employee such a large tax refund? Should the employer perhaps not pay the £900 (due to HMRC by 19/01/14) because a similar amount might well be due from HMRC for the final quarter because of this large tax refund.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question. Yes, you can make such a payment. However in the back of my mind, albeit from when I ran a large payroll section in the early 70s, is that the sum due can be restricted for a small employer. A large employer may refund with impunity, and I worked for a large employer. Things have moved on these last 40 years and such restrictions probably now longer apply. Have you tried looking in your Employer's Guide for operating PAYE? I just have and can find no warning against the practice.

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