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)
- Share buyback, possible embezzlement 124 4
- Where has Portia gone? 2,688 74
- Practice management software 1,018 18
- Change if career direction from industry to practice 144 2
- Thoughts on revenue recognition 567 18
- Associated disposals - Entrepreneur's relief 243 8
- Depreciation of Revalued Building 28 1
- Spousal transfer and PPR 743 32
- Portia ... Where art thou 414 1
- Taxation of serviced offices 201 3
- How can i allow my clients to digitally sign? 771 16
- Write off loan between companies 601 24
- Overseas business trip - accompanied by family 179 2
- Industry Reports 51 1
- recompense capital input 235 12
- Tax refunds for 2014/15 1,179 22
- unmarried couple, two houses, one rental - CGT? 312 8
- Exports/Dispatches - non VAT registered 111 2
- Capital allowances on taxis 251 2
- CT losses carry back 143 1
- Services via intermediaries and new HMRC reporting requirements 804
- RTI - duplicate employee record 569
- Pensions Regulator 459
- How hard is it to reduce a code? 416
- Sanzar 319
- How do you do it 308
- Digital marketing focus group 301
- Kashflow balance sheet difference 278
- new investor structure 187
- Bed & Breakfast trade via Limited Company 174