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Employer or recipient: who is liable for PAYE and NI on a bonus, asks SHAWN HEALY
KEY POINTS
- The recipient employee is chargeable but the employer is responsible for collection.
- Recovery of underpaid income tax from the employer or third-party.
- Determining that recovery should be from the employee.
- The National Insurance contributions position.
The recent case of David A Marshall Jeweller Ltd [2012] FTT 262 (TC) looked at the question of who was liable for PAYE/Class 1 National Insurance contributions on a bonus payment: the employer or the recipient.
A simple question you might think and one that is very pertinent in the current climate of economic woe and increased HMRC focus on tax loss.
That case involved a company director and shareholder who received a bonus which was credited to his directors’ loan account and declared on his self assessment tax return as employment income but with...
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