Reverse directors wages for year?
I have just taken over a new client, seems previous advisors have allowed the 2 directors (who are also shareholders) to continue paying themselves normal hourly wages with no obvious reason (dirs wages are at around £30k each a year, which is way in excess of standard £624 monthly amount for directors on salary & divs mix).
Assuming there will be sufficient profits when accounts are prepared - is there any reason why we could not reverse both directors wages from April '12 to date and pay them the £624 per month instead (purely from payroll perspective) - we don't think they are on RTI yet so HMRC have no knowledge of what has been paid in the year to date except the PAYE figures. PAYE has been paid up to date, with around £20k of it relating to the directors! - so therefore if we could reverse the wages to date they would get the £20k refunded.
Is this possible? Has anyone else done this before?
My only reservation is that it will raise suspicion with HMRC regarding the potential £20k refund - is this likely?
Thanks in advance for any replies.
(PS am only interested in this from a PAYE/payroll perspective - i realise that there will be other considerations when we come to prepare the annual accounts)
- Unusual Self Employment Expense Claims? 448 6
- Sage Instant cash based flat rate 65 2
- Loan notes payment of principal and interest 54 2
- HMRC VAT misstatement disclosure 190 2
- How to account fot Cross-border vat. 203 5
- are receipts needed? 213 7
- Paint Manufacturer Flat Rate Scheme 457 27
- Sage 50 181 2
- New accountant 223 5
- sole trader - operating under cis 224 7
- Limited Company - Personal Bank Account 2,954 65
- Tax case refeence request 109 1
- A change from the old Q v NQ debate 786 28
- Sage Payroll with 'employees' not having tax or NI deducted 228 4
- Auto enrolment for one or two director companies 1,908 29
- PayPal Transaction Analysis 243 5
- Working out a daily rate 181 5
- Auto enrolment 1,250 13
- Payroll dates 143 5
- VAT reports on trade debtors and trade creditors 288 8
- Skandia using wrong address 1,575
- Nil Rate Band Trust - index linked debt by way of charge over property 872
- International interest certificate 483
- NOVA 338
- Can Limited Company Buy Share of Rental Property? 260
- Management expenses for investment company 230
- Bonus Bonds 229
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 228
- Help with tax codes on Sage 173
- Capital reduction 165