PAYE RTI means I can't pay my wife. She's not happy.

[Gibboo]

Help - I can't pay my wife through payroll or as a freelancer! My wife worked part time for my limited company for the first time from April '15 to December '15. She did so as self employed, expecting to work for other companies up to the present. With her agreement I was going to pay her this quarter. Other opportunities did not come off for her however. I therefore asked my accountant to put her on the payroll this month to make the payments, so as not to fall on the wrong side of the employed/self employed divide. Because my business hasn't had employees for three years, the changed RTI rules passed me by and my accountant tells me it is too late to add her to the payroll (to complicate things we have just had a baby and to be qualified for Maternity Allowance she can't receive money for work done this month). I also can't pay her because of the self employed/employed issue. Anything I do about it?? (Not going the wife as shareholder/director route).

[jpcentral]

Not sure why your accountant is saying that she can't be added as an employee. The PAYE scheme may have been cancelled if it hasn't been used but it only takes a few days to set up a new scheme.

[Gibboo]

PAYE is up and running (for me). However, I am told the RTI submission was made on Feb 29 (relating as it did to my pay only). It apparently cannot handle backdated pay and it would look like my wife earned everything in March. However, she did no work in March and is on maternity leave. If she had done work in March she would be disqualified from Maternity Allowance or SMP...

[jpcentral]

The RTI system allows for corrections to be made to previous periods. Our software allows us to open a previous period and make an adjustment. The next RTI submission picks up the information and shows the year to date totals.

Obviously it is not something to be encouraged or routinely accepted but there are occasions when it is necessary. We run over 80 payrolls and have had employers forget to tell us about new starters (or leavers), queries on amounts paid in particular with respect to holiday/notice so we occasionally have to reopen a previous period.

Depending on the amounts involved she may also be able to take advantage of the KIT (Keep in Touch) days concession where she is allowed to work up to 10 days during maternity leave without it affecting SMP or MA. One point to watch out for is that she is not allowed to work in the two weeks following the actual birth.

[Gibboo]

Many thanks for the information which, combined with HMRC telling me she is allowed to both register on the payroll this month and be paid for work done earlier in the year (classed as 'infrequent payments'), means my accountant has reversed his position. I sure hope the HMRC person was right because it would mean my wife losing MA because it would otherwise look like she worked in March (MA not SMP as she wasn't quite employed for long enough)...