Settle that liability

I have a situation in which an employee is leaving his job in the near future. As part of his leaving arrangements the employer is making a number of payments which amount to the settlement of the employee’s pecuniary liabilities.

I understand that these should be treated as if they were merely a net payment for PAYE purposes.

But how should PAYE be accounted for if further cash payments are then made to the employee?

Can the employer make additional deductions from the employee’s actual cash remuneration so as to recover the PAYE that has to be paid over to HMRC?

Query 17 811 – Ex

Reply from Elf

While ‘PAYE’ is often used as a shorthand for both PAYE and Class 1 National Insurance contributions it is important to remember that the two...