A company, newly formed in April 2013, has carried on business for the last year; the directors (the only employees) have taken drawings each month; the company has not yet registered as an employer with HMRC; the company has not therefore processed any salaries yet for the directors for 2013/14 and made no RTI entries.
The company now wishes to register as an employer from April 2013 and process salaries for each month of 2013/14 via RTI, obviously now much in arrears. The salaries are fairly low and may give rise to a small NIC liability but no PAYE liability. The salaries will be credited to the directors' loan accounts to help offset the drawings.
Is this going to be a problem with HMRC's RTI? The entries are all going to be late but there are no penalties in the first year so........? The plan is to get these entries processed prior to what used to be the P35 submission date. Will this be OK or not?
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You are running out of time...
We have recently back dated new schemes and filed RTI from April to date in one swoop... However the RTI deadline is 19th April 2014, after this point our software (moneysoft) will not be able to file any data, although clients will be able to use HMRC basic PAYE tools to ensure the penalty deadline of 19th May is met. Do it now, do it quickly, but if you are registering them as new employers and expecting HMRC refs, you may already be too late, as refs can take 14 days or more.
Thanks - point taken. We'll use HMRC's BPTs to give us a little extra time - and hope the E'er refs arrive soon. I'm sure we'll get a ticking off at least. Cheers.
Money soft
We have recently back dated new schemes and filed RTI from April to date in one swoop... However the RTI deadline is 19th April 2014, after this point our software (moneysoft) will not be able to file any data, although clients will be able to use HMRC basic PAYE tools to ensure the penalty deadline of 19th May is met. Do it now, do it quickly, but if you are registering them as new employers and expecting HMRC refs, you may already be too late, as refs can take 14 days or more.
Why won't the software file after this date?
FPS deadline
Why won't the software file after this date?
Because HMRC will reject 2013-14 FPS submissions sent after 19 April 2014. If you need to amend figures after this date then you would need to do so via an Earlier Year Update (EYU), which Moneysoft does not support.
Penalties misconception
There are no IN YEAR penalties for 2013/14 (unless you obtain a tax advantage when normal 30/70/100% penalties could apply - and they could in this case as there will be a significant delay in paying the right tax which IS a tax advantage) - provided everything is up to date by 5 October this year in-year penalties will then apply from October this year onwards. At the moment you have open balances on director's current accounts (although I suppose they could be argued to be advances against remuneration) - could it be easier to pay a dividend to get rid of the balances and start the Payroll NOW... just a thought, although obviously the dividend would be in the wrong year.
I think there should be some salaries for last year - at least for minimum wage compliance. And there will be no tax due, perhaps just a little NIC, so a geared penalty should not be a problem; just don't want anything similar to CIS penalties for lateness.
Set up your payroll as an annual scheme and that way you risk only M12 and the final EPS of the year being late, assuming you receive the employers' ref & OA ref in time.
