I met a potential client (Limited company) today who has been receiving demands from HMRC on the underpayment of CIS. He has around 3 subcontractors and his client deducts 20% from the payments to the Limited Company (going gross is another issue). He started to trade in September 2015 and has only filed monthly CIS returns in April 2016.
What he has not done is the EPS filing for the contractor payments so that CIS can be netted off. Hence why HMRC are chasing
Presumably we need to file a EYU using the rather convoluted HMRC Basic PAYE tools ?
Furthermore, he has been taking money out of the bank account (Around 15K) without running a payroll. If we say this is payroll then we would have to run EYU. If we say it is dividends then he would end up paying more Corporation Tax. Due to the random sums taken out of the bank account woud HMRC argue this is dividends or Salary ?
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So far as the 2015/16 tax season is concerned, an EYU is the road to follow. It's that or set it against Corporation Tax.
For the drawings, HMRC won't argue either. They're loans to the director until he takes some action to convert them to salary (by paying himself one and crediting it against the loan) or diuvidends (by declaring on and crediting it against the loan).
There was a similar question a couple of minutes ago ....
;-)
You can split it - yes - but both salary and dividend fall in 2016/17 as you've missed the 2015/16 boat.