Payroll query- pay in lieu of holidays

screamer · 19-11-2015 1:45pm #1

Just wanted to double check something. We have an employee leaving, and is being paid in lieu of holiday pay. This person is paid weekly and so of course being hammered with tax out of the holiday pay as they only have a weeks worth of SRCOP and TC. I know when someone takes holidays for example a week, they have that week's tax credit, but is it possible to use any further week's tax credit towards this pay, or is it just the one week that I am allowed to use and then they have to pay tax on the higher scale out of their holiday pay?

thanks.

Diamond Doll · 19-11-2015 1:47pm

Don't see how you could use extra tax credits, they'll just have to take the hit and get it back with their P21 at the end of the year.

dbran · 19-11-2015 1:49pm

Its just the one week. You have no idea what they are going to be doing with their tax creditos and srco in the next few weeks. They have to suffer the tax on their holiday pay and get it back when they start the new job if applicable.

dbran

DmanDmythDledge · 19-11-2015 2:04pm

Surely they should be using the cumulative SRCOP and TC for the year to date and not just the weekly basis?

screamer · 19-11-2015 2:23pm

Thanks everyone, I thought as much, but just wanted to double check. Cheers.

myshirt · 19-11-2015 5:12pm

I would pause for a moment here.... post this in the works and jobs forum as I believe you cannot pay the staff member holiday pay in lieu. Instead, they actually have to take the holidays.

In effect, this means that while they will finish on say 20th November, you have to keep them on the payroll until the holidays run out, just in case they try double job. There will no issue with use of tax credits and srcop in those circumstances. If the gentleman wants to work elsewhere while on holidays from you, the new employer can deal with the tax consequences.

Try the work and jobs forum, as I am thinking out loud.

Diamond Doll · 19-11-2015 5:21pm

myshirt wrote: »

I would pause for a moment here.... post this in the works and jobs forum as I believe you cannot pay the staff member holiday pay in lieu. Instead, they actually have to take the holidays.

In effect, this means that while they will finish on say 20th November, you have to keep them on the payroll until the holidays run out, just in case they try double job. There will no issue with use of tax credits and srcop in those circumstances. If the gentleman wants to work elsewhere while on holidays from you, the new employer can deal with the tax consequences.

Try the work and jobs forum, as I am thinking out loud.

I don't think this is correct, my understanding is that the only time you can pay annual leave in lieu is when the employee is leaving.

screamer · 19-11-2015 5:24pm

Thanks, but it's OK to pay them their holidays I found this on iboa site, but it's similar for everyone:

The only circumstances in which a worker can be paid in lieu of statutory holidays is when the contract ends without the worker having taken all of the days due. The law clearly states that the employer "shall make" a payment in lieu.

Payroll query- pay in lieu of holidays

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