How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Sam Your Own Question

Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 12790
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Type Your UK Tax Question Here...
Sam is online now
A new question is answered every 9 seconds

An employee is shortly to leave us. We will pay notice but

Resolved Question:

An employee is shortly to leave us. We will pay notice but she will not work her notice. She also has a company car which she will have the use of during her notice period. Should we pay her notice pay in advance and when should her P45 be issued - now or at the end of the notice period, please?
Submitted: 4 years ago.
Category: UK Tax
Expert:  Sam replied 4 years ago.
HiCustomerbr />
Thanks for your question

The P45 should reflect the actual date of leaving, which will be inclusive of the notice period - so after the employment has actually ceased - similarly the P11d for the company car will tie in with this date as to when the car was available to


You will not issue the P45 until after this notice period - but should warn the employee that if they get employment in the meantime - that BR tax will apply on earnings made from new employment, up to this official date of leaving and then hand this P45 to that employer once received

You can make this notice pay in advance - but make sure the date of leaving and the month in which this pay is amde, reflects the actual elaving date - and in this instance you can issue the P45 with immediate effect

Thanks

Sam

Edited by SamTax on 3/3/2010 at 6:14 PM EST
Customer: replied 4 years ago.

Many thanks, Sam

 

Sorry to be dense but I don't quite understand your last paragraph. If, say our employee's last day of work was 31st March 2010 and we paid her 3 months notice, in advance, i.e. effectively employed until the end of June, how does this effect the dating of P45 and issue of same, please?

Expert:  Sam replied 4 years ago.
Hidlc1984

You are not being dense at all - I am happy to ask questions until such time you are happy with the answer

If you are to make the payment now - for a notice period 3 months in advance - then we breach into the new tax year and you will produce a P45 that pays her up to June 2010 - showing the sate of leaving as 30 June 2010 - Pay (which will just reflect the 3 months money for end of April end of May and to the end of June) and also 3 months worth of personal allowances -

Its only her final day working that is 31 March 2010 - but she is in effect being given 3 months notice - of which you would treat her as an employee until 30 June 2010
So the P45 will show date of leaving 30 June 2010 - Code 647L - Pay period Month 3 then also show the Pay xxxx Tax xxx

You will include her on the P35 for 2010/11 and a P11d also would need to be sent in for 2010/11 -

If you had not been continuing to provide her with the company car - then you could have just finalised this by making her leave date 31 March 2010 - will 4 months pay for March (March itself April May and June) - which would have collected BR (D0 if higher rate) tax on the 3 months notice - but as you are still treating her fully as an employee until 30 June 2010 - then the P45 must tie in with that and her actual employment leaving date

Thanks

Sam





Customer: replied 4 years ago.

So.......is it cleaner to not pay the notice in advance but to pay as separate payments for April, May, June?

 

(You will deserve a bonus for this one)!

Expert:  Sam replied 4 years ago.
Hi dlc

Thanks for your response and you ask as much as you feel you need to - I am happy to keep responding - and a bonus would be very much appreciated !

It would be cleaner to pay the lot at 31/03/2010 - and charge tax on it - issue a P45 - Month 12 - etc etc - but as the company car will continue to June 2010 - you are somewhat forced into running each pay roll run for this employee at the end of each month until the notice period is up (30 June 2010)

So run the payroll at the end of each month - allowing the pay to be given tax free allowances - and then taxed and charged National Insurance accordingly (which includes a benefit charge for the company car - and any other company benefits)


Or we would have company car for the period 06/04/2010 to 30/06/2010 with no employment on which tax can be collected on this benefit - which would put this employee is a potential unpaid tax position !

Thanks

Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 12790
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and other UK Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
< Last | Next >
  • http://ww2.justanswer.com/uploads/baktax/2009-7-15_202414_Frame.jpg Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
  • http://ww2.justanswer.com/uploads/teap007/2009-01-10_145815_bill_justanswer_for_profile.jpg TEAP007's Avatar

    TEAP007

    Tax Preparer

    Satisfied Customers:

    754
    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • http://ww2.justanswer.com/uploads/BE/berduchwal/2011-6-7_84817_pict0854.64x64.jpg berduchwal's Avatar

    berduchwal

    Accountant

    Satisfied Customers:

    669
    Qualified accountant and bookkeeper running my own practice since 2008.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    61
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/RO/Ronaann/2012-3-19_23343_SSL22629.64x64.JPG Mrs-Tax's Avatar

    Mrs-Tax

    Tax Adviser

    Satisfied Customers:

    59
    Law Degree, 19 years in UK Tax.
  • http://ww2.justanswer.com/uploads/TG/TGraham12/2012-7-17_81212_bigstockBusinessHandshake508163.64x64.jpg Thomas's Avatar

    Thomas

    Solicitor

    Satisfied Customers:

    48
    Exposure to general tax issues
  • http://ww2.justanswer.com/uploads/struppiaml/2009-10-9_95150_anthony_business_002.jpg AnthonyL's Avatar

    AnthonyL

    Tax Adviser

    Satisfied Customers:

    19
    ATT, ATII, 12 years tax experience