Employee remuneration

Salaries and wages are usually deducted in the period in which the wages are actually paid. However, an additional rule provides that tax relief is given for accrued wages as long as the wages are actually paid within nine months of the end of the accounting period. Where remuneration is paid on or after 1 April 2017, and also constitutes employee benefit contributions, then the rules for deduction follow the provisions discussed in the section below on ‘Employee benefit contributions’.

If the accrued wages are not paid within nine months of the end of the period:

• •the accrued amount is added back, and
• •relief is given in the period in which the wages are actually paid

Remuneration is most commonly accrued in the form of bonuses. Creditors should always be reviewed for any amounts of accrued remuneration.

Often, the tax computation is prepared in advance of the ‘nine-month’ date. In this circumstance, where remuneration is accrued but unpaid when the calculation is made, it must be assumed to be unpaid at the nine-month date. The position may be amended subsequently if the amount is paid over before the nine-month date.

If the tax computation is prepared before the nine-month date, and there are any amounts of remuneration which are unpaid which were accrued at the accounting date, then the tax consequences should be considered as soon as