UK Staff Bonuses query

Feb 11, 2022
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United Kingdom
Morning all (or evening for some ::))

I have a query on staff bonuses at year end and impact on the annual accounts

I will be doing the 21/22 accounts, yr ended 31 march 22

Once I arrive at a profit before tax , we then build in a profit scheme for employees that we have run for several years now
say example
profit before tax is 200k
profit bonuses 100k (ignore the NI that needs to be added on)
normally i would accrue these bonuses of 100k into the 21/22 accounts , which then gives a profit of 100k which is then taxed.
what is left over after that is partly paid out in dividends.
However the Board have now decided they want to pay additional bonuses to certain staff

so , original profit before tax 200k
normal profit bonuses 100k
additional discretionary bonuses for some , say, 80k (again to be accrued into 21/22 accounts)

thus leaving a profit for 21/22 of £20k to then be taxed , unlikely any dividend payments.

my query is, is this ok to do ? The MD is keen for it to happen

many thanks for any advice




VIP Member
Sep 1, 2011
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Have you followed the correct procedure:-

1. Have you got a Board Minute on or before 31st March 2022 (prior to the year-end) documenting the director's intention to pay a bonus or bonuses and outlining the specific amounts involved;

2. That the accrued bonus to be paid via the PAYE system within nine months of the accounting year end.

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