PAYE mistake - how to correct entries

[corvinn]

Hello,

I have the following situation and need help how to enter and tag properly in QuickFile.

By accident, on 27 October the company paid the full amount of the gross salary to its director, without deducting PAYE tax and employee NI (transaction 1).

On 31 October the director paid back the difference between the gross and net salary to the company’s bank account (transaction 2).

31 October is the end of the accounting period for the company, so this created a liability to HMRC and will have to be reported in the company accounts.

On 28 November the company paid the PAYE employee tax and NI to HMRC (transaction 3).

Another question, shall the bank transactions for the PAYE employee tax and NI be tagged as payments to HMRC or as salary?

Usually, all bookkeeping (including salaries) is done by importing and tagging from the bank statement, but in this situation, due to the end of the accounting period, unpaid PAYE obligations will have to be entered before the actual payment.

Please advise.

[FaradayKeynes]

Have the transactions gone through QF too or just actual bank account? if yes which nominal codes were used to record initial transactions

[corvinn]

Only bank account for now, and imported to QF. Not tagged, yet.

[FaradayKeynes]

To record payroll, you can do one journal as follows
Dr Director Salary (gross)
Dr Employer Ni (if any)
Cr P.A.Y.E (income tax + Emplee NI)
Cr Director a/c (net wages)

now you can tag money out(gross wages) and money in (difference of gross and net wages) to director a/c

Your year end paye creditors booked via journal above and when you tag transaction 3, use P.A.Y.E a/c to settle liability