Running an annual payroll for a 1 Director Company

Help with runing an annual payrun in Month 12 totalling £8,060 for a one director company

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I'd like to run an annual payrun in Month 12 totalling £8,060 for a one director company however, when I try to load up this payment into my payroll software, it triggers both an employers NI liability of £666 and an employee NI liability of £527. I tried this also using the HMRC Basic PAYE tool and it's the same answer. Does anyone know what I would have to do in order to run an annual payroll in Month 12 each year as technically there shouldn't be any NI liability due on this payment.

Thanks in advance.

Polly M

 

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JCACE
By jcace
21st Mar 2017 23:23

In order for there not to be a National Insurance liability, your payroll software needs to show that the individual concerned is a director and has been so for the whole of the tax year. If the person was appointed later than 6 April 2016, the earnings threshold will be reduced accordingly.

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By Polly Lee
21st Mar 2017 23:39

If he's had no other earnings the whole of the tax year then I think simply process the payroll in M12 with the NI liability and then reclaim through his SA.

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Replying to Polly Lee:
RLI
By lionofludesch
22nd Mar 2017 07:29

As far as I'm aware, this won't work for NI. The employee needs to be flagged as a director and, as stated above, must have been a director for the whole year. You can't claim it back through SA - how would you deal with the employer's share ??

Loads of threads on annual payments for directors - I keep saying it but just pay them monthly and avoid all the pitfalls!!!!

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