Real-life MMD: Should I let my brother pay staff twice?

The brother will be paying Employer's National Insurance on this person's wages so he should be entitled to know when he's making an overpayment to HMRC.

The brother will be paying this person's wages so he should be entitled to know when he's making an overpayment to staff.

Anyone familar with paying wages will know that immediately wages are paid, the info goes to HMRC on a new system called Real Time Information. Not sorting out this out now will lead to issues later on.

The employee may not know he's been overpaid - he may not be an MSE follower.

The original poster who does the accounts (may not do the payroll) should point out the overpayment and prove themselves trustworthy as should another error arise they may have already lost the trust of the brother and this will definitely cause difficulties.

Who knows - the person paying the wages may have an agreement with the overpaid employee to split the overpaid wages - working with people and money has made me cynicnal and very cautious.

Always make sure you are whiter than white when it comes to dealing with other people's money in my opinion. I am a financial administrator for a small company, not a banker by the way!

gloriouslyhappy wrote: »

I would have a quiet word with the employee, he must realise he's been overpaid and having it out in the open could be a big relief for him. Work out a repayment plan, you've mentioned he's struggling, so sort something out he can live with. Once that's done, tell your brother and make a note for the records. As others have said, the tax man as well as the accountants will spot the error sooner or later so much better to deal with it now in-house and have it all on the record.

Also, as part of your duty of care to your employee, I'd think about referring him to an advice and / or debt management organisation like the Citizens' Advice Bureau, see if they can give him some good pointers so he'll struggle a bit less.

Then, I'd have the payroll system thoroughly assessed to make sure no other duplicate payments occur, the poor employee really shouldn't be put in the position of thinking he's got a windfall when it's an accounting error!

You have covered everything I was going to say and dealing with the employee in a sympathetic way is vital. How many of us in financial straits would not b tempted to say nothing about an extra months salary, especially if we felt underpaid by the employer. The OP dilemma seemed to reflect this in tone.