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Post Info TOPIC: SMP
Jay


Senior Member

Status: Offline
Posts: 202
Date:
SMP


Good morning all.

One of our Ltd Company clients has one salaried director and one full time employee.

The employee is on SMP, and an advance was made to cover this by HMRC as the Directors PAYE deductions would not cover the SMP.

I have just been advised that the company is to cease trading due to personal circumstances of the Director.

The company has sufficient funds to meet all debts.

Can anyone advise what is the situation regarding the SMP due to the employee until June 2019, assuming the company ceases February / March?

Thank you

Jay



__________________


Master Book-keeper

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Posts: 2670
Date:

Hi Jay, that is an excellent question.

The employee should continue to be paid SMP up until the 39 weeks, so I would do advance payslips for the remaining weeks and pay her a lump sum before closing.

Also take into account whether she is due any redundancy pay, which would be in addition to the SMP



__________________

John

Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.

Jay


Senior Member

Status: Offline
Posts: 202
Date:

Good morning John.

Thank you for such a quick response. This was the answer that we ( and the Director) were hoping for.

BW

Jay



__________________


Master Book-keeper

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Posts: 7201
Date:

Hi Jay
Im sure that you know that company does not need to cease trading due to his personal circumstances - all he needs to do is appoint another board. One of the main advantages of being limited imo.

Im sure you also know that if the company has sufficient funds to repay its debts and he has paid himself they (liquidators/HMRC) will likely go after said director.

The company can cease trading in February/March but keep paying her.

If you are talking about it being dissolved before then thats a different issue.

What did they do with the SMP they received? Has it just gone into cashflow? I would suggest this money is kept completely segregated (different bank account).

__________________

Joanne

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

Jay


Senior Member

Status: Offline
Posts: 202
Date:

Thank you for your guidance.

The Company has always made sufficient profits to pay all debts on time,and the only debts are ongoing quarterly VAT which are paid by DD.

The only Director, in his late 70's, now has serious health issues that unfortunately will not improve. He has decided to "retire" asap. He has no immediate family and the value in the Company is his expertise, rather than a product.

Yes (apologies, poor initial question on my part), the company is to be dissolved, with no debts.

The SMP is held in the Company Bank Account. No 2.

BW

Jay

Sorry for the large spaces, it does not show on my question or on my preview ???



-- Edited by Jay on Tuesday 4th of December 2018 12:49:16 PM

__________________


Master Book-keeper

Status: Offline
Posts: 7201
Date:

Hi Jay
Ah right. I thought you wouldve considered it, but thought I should mention it just in case. So John's plan sounds like it would work well, just delay the final dissolution a little.

No need to apologise Jay.


Ive noticed a gap before in posting - if you come back to it after a little while you will probably see some (supposedly) targeted advert in the space.

I hate that, but its a free site so there has to be some kind of payback for Steve I guess.



-- Edited by Cheshire on Tuesday 4th of December 2018 03:15:04 PM

__________________

Joanne

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

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