Accrued holiday payment through PAYE or separate

sajida12

How does accrued leave that one couldnt take before employment termination is payed, through PAYE or separate?

Brynsam

It's potentially taxable, so through PAYE.

AskAsk

Brynsam said:

It's potentially taxable, so through PAYE.

i recollect that upaid holiday pay is taxable when i was made redundant and got that paid, so yes, would agree it will be going through PAYE.

jamielutz1987

sajida12 said:

How does accrued leave that one couldnt take before employment termination is payed, through PAYE or separate?

Payment for accrued but untaken leave upon termination is part of your salary and should go through PAYE.

However, as has happened for my partner (who had a dispute with their ex-employer after leaving, claiming underpaid holiday pay), the ex-employer finally paid up without accepting liability but it was in the form of a cheque with no accompanying documentation (payslip, etc). They aren't responding to any communication from my partner so we don't know if it's been processed through PAYE or not.

My partner will put it through their self assessment as miscellaneous earnings.

chrisbur

jamielutz1987 said:

sajida12 said:

How does accrued leave that one couldnt take before employment termination is payed, through PAYE or separate?

Payment for accrued but untaken leave upon termination is part of your salary and should go through PAYE.

However, as has happened for my partner (who had a dispute with their ex-employer after leaving, claiming underpaid holiday pay), the ex-employer finally paid up without accepting liability but it was in the form of a cheque with no accompanying documentation (payslip, etc). They aren't responding to any communication from my partner so we don't know if it's been processed through PAYE or not.

My partner will put it through their self assessment as miscellaneous earnings.

Might be worth checking the Personal Tax Account.  I believe that you can see the gross reported by the old employer so can tell if holiday pay was added since last payslip.  Would be a shame to pay tax on something that was a net pay.

jamielutz1987

chrisbur said:

jamielutz1987 said:

sajida12 said:

How does accrued leave that one couldnt take before employment termination is payed, through PAYE or separate?

Payment for accrued but untaken leave upon termination is part of your salary and should go through PAYE.

However, as has happened for my partner (who had a dispute with their ex-employer after leaving, claiming underpaid holiday pay), the ex-employer finally paid up without accepting liability but it was in the form of a cheque with no accompanying documentation (payslip, etc). They aren't responding to any communication from my partner so we don't know if it's been processed through PAYE or not.

My partner will put it through their self assessment as miscellaneous earnings.

Might be worth checking the Personal Tax Account.  I believe that you can see the gross reported by the old employer so can tell if holiday pay was added since last payslip. Would be a shame to pay tax on something that was a net pay.

Completely missed that. It was indeed the gross amount on the cheque, so I guess the ex-employer didn't put it through PAYE.

Sandtree

If they havent accepted liability it has probably been raised as a gesture of goodwill/ extra-contractual payment and so wouldn't go through PAYE

jamielutz1987

Sandtree said:

If they havent accepted liability it has probably been raised as a gesture of goodwill/ extra-contractual payment and so wouldn't go through PAYE

In that case I guess that's a win as my partner saves on tax and NI? And the ex-employer saves on employer's NI as well. Seems a bit inappropriate though.

Savvy_Sue

If they'd already issued the P45, then they OUGHT to have deducted tax and NI, I can't remember if you have to send a payslip (had to do this once). You can, as stated, check the personal tax account, but miscellaneous sounds sensible.