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Posted Thu, 12 Oct 2023 13:49:27 GMT by
My wife's employer was established in previous tax year and hired her, but they could only finalize their PAYE setup in this tax year. They now would like to pay her salary from previous tax year. The accountant is proposing to pay the gross amount to her as some employment expense and her to use Self Assessment to include that in her relevant tax calculation. Is this a viable and legal route from both parties' perspectives?
Posted Mon, 16 Oct 2023 12:16:04 GMT by HMRC Admin 18
Hi,

Guidance for employers re: arrears of pay is provided at EIM02530:                 

Employment Income Manual                                                                                                 ,

From the perspective of an employee who receives arreas of pay, the arrears are treated as received (and therefore taxable) in the year in which the individual became entitled to the payment, rather than when the payment was actually made. Please refer to the guidance at EIM42290:                     

Employment Income Manual

Thank you.

 

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