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If an employee receives a payment for a previous pay period the HMRC allows for the national insurance contributions, student loan deductions and week1 month 1 tax calculations to be adjusted, so that they are calculated as if that payment was processed during the correct, previous , pay period.
The purpose of this document is to describe how this feature is used within InPay. Further information is available in chapter 3 of the CWG2 document - https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions.
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- A mistimed payment cannot be entered for a director
- A mistimed payment cannot be made where the period’s allowance has already been used (this could be from a normal payment, a mistimed payment in a previous period or due to its use in an advanced holiday period) It should be noted that a period can be used if the only payment made in that period was itself a mistimed payment.
- A mistimed payment can be made from a previous tax year, however this uses the contribution rates and limits appropriate to the year in which the payment is actually made
- The mistimed payment will be calculated against the NI letter that is applicable for the period the payment is made
- Upon changing NI letter any mistimed payments to be paid in the current period will be recalculated
- Where a mistimed payment is entered manually (rather than from a timesheet) it is the user’s responsibility to ensure that there is enough pay in the payment period to cover the mistimed payments.
- A user will be required to delete any mistimed payments in a period prior to moving an employee onto a new payroll
- When the out of step timesheets flag is ticked, InPay can only automatically allocate timesheets from InTime and pre-processed fees, into mistimed periods,. Any other payments will use the NI allowance of the period they are entered for. The result of this is that if at a later date a timesheet is received for the earlier period the allowance will already have been used and the worker will not receive the NI benefit. It is recommended therefore that all payments are sent from InTime,
- Tax, National Insurance and Student Loans cannot be overridden in periods containing a mistimed payment. If a statutory override is required the mistimed payment(s) must be deleted from the Pay -> Mistimed Payments screen
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