Payroll problem

A client is in dispute with their payroll software supplier as to how to treat payments to new employees who are taken on too late to be paid on the current payroll run. HMRC booklet CWG2 states on page 38 that ‘if the interval between an employee starting work and the first payday spans two or more earnings periods … work out National Insurance contributions on the amounts due for each of those earnings periods separately…’.

The software provider refuses to provide this facility to split the NIC calculation on the grounds that this guidance is not supported by legislation. #

The client has asked for guidance from HMRC and has been told once that the software supplier is correct and once that they the employer are correct. They are concerned that they may be held liable if they are subject to...