can someone settle an argument please.
If I am paid for work done in December 2016 on 15th January 2017 - does that payment figure go into the 2016 P60 or should it become part of the 2017 tax returns?
I believe it should be part of the 2017 return and subject to the 2017 taxes due as the payment was made in 2017 no matter what period it relates to.
thanks
As Joe_90 said, the payroll operation will treat the pay and tax as occurring in 2017 and nothing further will happen.
However, strictly, in the circumstances mentioned, the pay relates to 2016 and the tax relates to 2017.
Just another example of woolly tax rules.
This is not something dreamed up by Revenue, rather it is case law -
Income relates to the year it is earned:
McKeown v Roe, Irish case vol 1, p 206,
Dracup v Radcliffe, vol 27, p 188, and
Heasman v Jordan, vol 35, p 518.
Income tax deducted under PAYE relates to the year the income was paid:
Bedford v Hannon, Irish case - Leaflet No. 105.