In last week’s newsletter, we suggested a possible strategy of delaying the end of October payroll run until after 5 November for certain employees to save NICs following the removal of the additional 1.25% for employees and employers from 6 November.

While such planning could be useful for delaying discretionary payments, such as bonuses and commissions, we should be alert to anti-avoidance provisions (in the form of Regulation 31 of the Social Security (Contributions) Regulations 2001 (SI 2001 No 1004)) that give HMRC the power to effectively reverse the planning and secure the NICs that would have been due had the regular payroll timing been maintained. Consequently, deferring the regular monthly salary is likely to be challenged by HMRC and we wouldn’t recommend this course of action.

If you would like to discuss the timing of planned bonuses, commissions or other payments, where there is not a contractual payment date, please do get in touch.