I realise that this may be somewhat an*l but I’ve come across what I consider a “limitation” in the way payroll transactions are treated. Either that, or I’m thick and could use a steer on how to accomplish what I’m wanting to do…
Since the change in November which brought in the automatic creation of payroll journals, I’ve noticed that the journal credits ledger 2210 with the amount the company pays to HMRC. In principle, that’s fine. However, 2210 is labelled simply “P.A.Y.E.” whereas 2211 is labelled “National Insurance”. I BELIEVE that the HMRC P.A.Y.E. system refers to both Income Tax and National Insurance Contributions. So I think re-labelling 2210 as “P.A.Y.E. - Income Tax” and 2211 as “P.A.Y.E - National Insurance” would be more consistent.
Why does this matter?
It would be nice to be able to split the tagging of payments to HMRC across these two ledgers in order accurately to keep tabs or run a customized report on how much Income Tax and NI (separately) an employee has been docked in their payslip. I can see no way of doing that at present as tagging a payment to “Tax” only offers “VAT”, “P.A.Y.E Liability”, or “Corporation Tax” and choosing PAYE only affects 2210.
I realise this may be a challenging feature to create as it would require the tagging (with the tax category) to interrogate the user about how much is NI vs Income Tax. Regardless, it seems a useful feature to add as it would allow the user much better insight into the tax affairs of the employees concerned.
Also, I think it would be useful to add the PAYE position (again, possibly itemized by Income Tax and NI, as above) to the standard “Tax Summary” report - it seems odd that it only currently tracks VAT and Corporation Tax…
What do you think? (or can you advise a better solution?).