Entering HMRC Employers Allowance without using QB Payroll

SiloSean · ‎August 22, 2019

I have been manually recording employee pay records without using QB Payroll, including recording the payments to HRMC for PAYE and NI. However, I have realised that I need to record the HMRC Employers Allowance and I am not sure where or how to post this. Has anyone else had this issue and found a solution?

SiloSean · ‎August 22, 2019

Dear John C,

Thanks for the reply. I think I may have solved the issue by looking at the method I used in Sage, which seemed to clear the liabilities account ok. I will use Journal Entry to transfer the amount from the National Insurance (current liabilities under tax and national insurance) to Employer's NI Contributions (expenses under cost of labour). As the expense will be an overhead these should clear at the end of our financial year, unlike liabilities that are carried forward to the next year.

If this doesn't work I will talk to an accountant.

View solution in original post

John C · ‎August 22, 2019

Hi SiloSean

All of our payroll systems automatically calculate the Employees Allowance once it is selected. When the payroll is ran it creates a journal that doesn't include any Employers NI until the £3000 allowance has been reached.Once it has been reached the journal credits a liability account and debits an expense account. When you then pay HMRC the liability due you will have to create an expense choosing the liability account in the category, which will negate the liability generated.

As you are not using any of the payroll systems it would be a case of creating a manual record of how much Employers NI you have generated and then once it has been used start including the figures.

We are not trained accountants and we would ask you to qualify any of the advice given with an accountant.

SiloSean · ‎August 22, 2019

Dear John C,

Thanks for the reply. I think I may have solved the issue by looking at the method I used in Sage, which seemed to clear the liabilities account ok. I will use Journal Entry to transfer the amount from the National Insurance (current liabilities under tax and national insurance) to Employer's NI Contributions (expenses under cost of labour). As the expense will be an overhead these should clear at the end of our financial year, unlike liabilities that are carried forward to the next year.

If this doesn't work I will talk to an accountant.

SiloSean · ‎August 22, 2019

Dear John C,

Just to let you know, I have done what I said and the result is what I needed. The balances have now cleared and the accounts are correct! I now have a 0 balance in National Insurance and in Employers NI Contributions.

Many thanks

Diana39 · ‎January 19, 2021

Hi there, I am wondering if you please assist me? We are currently not using QB for payroll. Could you tell me the best way to record salaries, NI and pension splits? Thank you!

ShiellaGraceA · ‎January 19, 2021

Thanks for joining us here, @Diana39.

Currently, recording NI and pension contributions are through payroll. Since you're not using payroll, you'll want to create a journal entry. However, it would be best to consult an accountant. This way, they can guide you on how to properly handle this in QuickBooks.

You can visit this link to find an accountant or bookkeeper near you.

To create a journal entry:

Go to +New.
Select Journal entry under Other.
Enter the entry details.
Click Save and close.

I'm also adding this article to help you along the way: Payroll Tax Changes 2020/2021.

Fill me in if you still have questions or concerns with QuickBooks. I'm always here for you. Take care and have a good one.

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Entering HMRC Employers Allowance without using QB Payroll