Smp recovered - The Book-keepers Forum (UK)

Hartupa · Member

Smp recovered

Stardoe · Guru

Hi there,

SMP recovered should be part of the payroll process (it is deducted from the amount of PAYE & NI to be paid to HMRC every month). There should also be an amount of NI compensation included. So yes, this should be part of the reconciliation process. When you say "the ledger" is virtually zero, which ledger are you talking about? If you mean the PAYE & NI Ctrl account, then if all the PAYE & NI has been paid to HMRC then this should be zero, not virtually zero.

Hope this helps!

Hartupa · Member

The ledger is SMP recovered which is the actual paid SMP minus the 92 percent SMP recovered
That is why the ledger is nearly at zero
All I need to know is whether to add back the SMP recovered to my payroll reconciliation as a transaction on its own
Or should it not be included at all?
Thanks

Stardoe · Guru

Ah right, you are only claiming back 92% I would certainly include it in your reconciliation as a transaction on its own as it has been paid to an employee(s) and is part of payroll.

Hartupa · Member

Thanks for that, but the control account is zero as this is what was sent to HMRC.
I just need to know whether the SMP recovered should be taken off the payroll reconciliation
Or should it be zero?

Thanks

Stardoe · Guru

Sorry, I'm probably being really thick but don't really understand what you are asking......how are you doing your payroll reconciliation?

Hartupa · Member

I have a figure from the accounts package and I have to add or subtract various items which are in the payroll nominal codes eg invoices coded to pay.

But I am still not sure whether to add back SMP recovered.

is SMP recovered a reconciling item?

Thanks

Stardoe · Guru

Well, basically yes, SMP recovered is a reconcilable item as it is part of payroll.

Not sure why you would have invoices coded to payroll though?

Hartupa · Member

The invoices are coded to the payroll codes as they are pay but not put through the actual payroll

it is quite a complicated scenario but I need to know as my job is on the line at mo.

The nominal ledger in the accounts package is roughly £200 pounds due to the 92 percent

To reconcile the accounts to the payroll I need to know whether to add back on the SMP recovered.

Thanks

Stardoe · Guru

Right, well this is how your accounts should look:-

Gross wages (inc SMP Paid) Â (Expenses code)	Dr xxxxx
Er's NI Â (Expenses code)	Dr xxxxx
Pensions etc Â (Expenses code)	Dr xxxxx
Net wages Â (Balance sheet code)	Cr xxxxx
PAYE & NI Control Â (Balance sheet code)	Cr xxxxx
SMP reclaimed Â (Expenses code)	Cr xxxxx
NI compensation Â (Expenses code)	Cr xxxxx
PAYE & NI Control (inc amount of SMP & NI reclaimed) Â (Balance sheet code)	Dr xxxxx

If all PAYE & NI has been paid to HMRC and all wages paid, all balance sheet codes should be zero. Â There should be balances in all the Expenses codes (including a credit balance in the SMP reclaimed code and the NI compensation code if you treat it this way...some people do it slightly differently) until the accounts are done at the year end and then the balances will be balanced off to the P & L account.

You don't need to "add anything back" or "take anything out", the balances are the balances. Â If you have a figure for SMP reclaimed in your reconciliation, you need to make sure that it matched the balances in your SMP reclaimed ledger account.

Please note that if keeping your job relies on this advice, then this is advice given in good faith, but is just advice and if you are unsure then it is best to seek the advice of a qualified accountant.

Edit: I'm not sure that any "Invoices" should be included in the "Payroll" figure. If these are invoices by self-employed or sub-contractors they really should be under a separate code under direct expenses as they cannot balance with the payroll figures as there will be no tax or ni to be included (unless you are deducting CIS tax).

2nd edit: sorry, don't know what all those A's are in the table!!

-- Edited by Stardoe on Tuesday 16th of April 2013 03:44:07 PM

-- Edited by Stardoe on Tuesday 16th of April 2013 03:45:04 PM

Hartupa · Member

Thank you very much for all your help
Just need to get my head round how our accounts ledgers
Work

Stardoe · Guru

No problem. What accounts package are you using?

Hartupa · Member

It is called Dream

Stardoe · Guru

Not heard of that one before.

Spamkebab · Expert

How do you get them squiggly lines on your A's Pauline? lol.

Stardoe · Guru

I don't even know how I got the A's in the first place Neil yet alone the squiggly line.....lol Might be something to do with the fact the data is inserted in a table? No idea

Spamkebab · Expert

Well it's very fancypants

Shamus · Forum Moderator & Expert

I thought that Pauline was turning Canadian (go on, go back and read all of those words with an A with a rising tone at the end and see what it sounds like, lol).

Sure its all down to this talk on the site yesterday started by Amanda about us rats abandoning the sinking ship... Oops, do you think that I should mention sinking ships!

Stardoe · Guru

Lol.....very funny Shaun. Just noticed that there are a couple of A's in the body of the text as well. I did have a bit of trouble when I posted the entire thing and I'd saved it into Word first and then copied and pasted it back. I've seen other posts with these A's in as well.

What's this talk about rats and sinking ships? Must have missed that one!

Shamus · Forum Moderator & Expert

Hi Pauline,

it was in the Baroness Thatcher thread where Amanda was saying how tired she is with the UK and is encouraging her children to seek alterate countries as they get older.

The sinking ships comment just linked in the Belgrano thread.

Tut, it loses something when I explain it... Made me smile whilst I was writing it though and thought, Ooh, thats accidentally almost clever.

Stardoe · Guru

Definitely missed that one then. My middle daughter and her fiance are getting married in August and are talking about emigrating to New Zealand. I may go with them!