director invoicing ltd company for costs

LTD company cant afford to pay director a wage. Director is self employed otherwise. Invoicing

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Hi everyone, this post interested me as i'm in the same position the LTD company is a new start up and so cant pay a regular paye wage to me at the moment... I presumed that I should post self employed invoices for my labour to code 6002 sub contractors is that incorrect? Im using sage line 50 V12. Really appreciate any guidance im struggling to get my head around it all, many thanks.

My COA...

N/C    Name
    
0010    Freehold Property
0011    Leasehold Property
0020    Plant and Machinery
0021    Plant/Machinery Depreciation
0030    Office Equipment
0031    Office Equipment Depreciation
0040    Furniture and Fixtures
0041    Furniture/Fixture Depreciation
0050    Motor Vehicles
0051    Motor Vehicles Depreciation
1001    Stock
1002    Work in Progress
1003    Finished Goods
1100    Debtors Control Account
1101    Sundry Debtors
1102    Other Debtors
1103    Prepayments
1200    Lloyds Bank Current Account
1210    Bank Deposit Account
1220    Building Society Account
1230    Petty Cash
1240    Company Credit Card
1250    Credit Card Receipts
2100    Creditors Control Account
2101    Sundry Creditors
2102    Other Creditors
2109    Accruals
2200    Sales Tax Control Account
2201    Purchase Tax Control Account
2202    VAT Liability
2210    P.A.Y.E.
2211    National Insurance
2220    Net Wages
2230    Pension Fund
2300    Loans
2301    Director Loan
2310    Hire Purchase
2320    Corporation Tax
2330    Mortgages
3000    Ordinary Shares
3010    Preference Shares
3100    Reserves
3101    Undistributed Reserves
3200    Profit and Loss Account
4000    Sales Web Design
4001    Sales Hosting
4002    Sales Seo & Remote Support
4009    Discounts Allowed
4100    Sales Hardware Repairs
4101    Sales Hardware & Software
4200    Sales of Assets
4400    Credit Charges (Late Payments)
4900    Miscellaneous Income
4901    Royalties Received
4902    Commissions Received
4903    Insurance Claims
4904    Rent Income
4905    Distribution and Carriage
5000    Materials Purchased
5001    Materials Imported
5002    Miscellaneous Purchases
5003    Packaging
5009    Discounts Taken
5100    Carriage
5101    Import Duty
5102    Transport Insurance
5200    Opening Stock
5201    Closing Stock
6000    Productive Labour
6001    Cost of Sales Labour
6002    Sub-Contractors
6003    Scripts & Coding
6100    Sales Commissions
6200    Sales Promotions
6201    Advertising
6202    Gifts and Samples
6203    P.R. (Literature & Brochures)
6900    Miscellaneous Expenses
7000    Gross Wages
7001    Directors Salaries
7002    Directors Remuneration
7003    Staff Salaries
7004    Wages - Regular
7005    Wages - Casual
7006    Employers N.I.
7007    Employers Pensions
7008    Recruitment Expenses
7009    Adjustments
7010    SSP Reclaimed
7011    SMP Reclaimed
7100    Rent
7102    Water Rates
7103    General Rates
7104    Premises Insurance
7200    Electricity
7201    Gas
7202    Oil
7203    Other Heating Costs
7300    Fuel and Oil
7301    Repairs and Servicing
7302    Licences
7303    Vehicle Insurance
7304    Miscellaneous Motor Expenses
7350    Scale Charges
7400    Travelling
7401    Car Hire
7402    Hotels
7403    U.K. Entertainment
7404    Overseas Entertainment
7405    Overseas Travelling
7406    Subsistence
7500    Printing
7501    Postage and Carriage
7502    Broardband & Telephone
7503    Mobile Phones
7504    Office Stationery
7505    Books etc.
7506    Hosting & Domains
7600    Legal Fees
7601    Audit and Accountancy Fees
7602    Consultancy Fees
7603    Professional Fees
7700    Equipment Hire
7701    Office Machine Maintenance
7800    Repairs and Renewals
7801    Cleaning
7802    Laundry
7803    Premises Expenses
7900    Bank Interest Paid
7901    Bank Charges
7902    Currency Charges
7903    Loan Interest Paid
7904    H.P. Interest
7905    Credit Charges
7906    Exchange Rate Variance
8000    Depreciation
8001    Plant/Machinery Depreciation
8002    Furniture/Fitting Depreciation
8003    Vehicle Depreciation
8004    Office Equipment Depreciation
8100    Bad Debt Write Off
8102    Bad Debt Provision
8200    Donations
8201    Subscriptions
8202    Clothing Costs
8203    Training Costs
8204    Insurance
8205    Refreshments
8206    AWS Amazon Backup Services
9998    Suspense Account
9999    Mispostings Account
 

Replies (18)

Comments for this post are now closed.

ALISK
By atleastisoundknowledgable...
18th Jul 2018 17:18

Hi Nick,

So the company can’t afford to pay you wages, but can afford to pay your invoices?

There’s (potentially) a straightforward solution to this, can I suggest that you get an accountant? Especially as your accounts are 2.5 months overdue, you need to act fast as the fines jump when you hit 3 months.

Thanks (1)
By Tim Vane
18th Jul 2018 17:19

You will need to explain how the company can afford to pay a consultant but cannot afford to pay an employee. That rather sounds like the company is trying to evade payment of taxes and NIC. If the issue of payment is cash-flow and paying PAYE and NIC then surely the owner(s) should be subsidising the company to pay the wages and taxes in the same way as it would be subsidising to pay the consultant.

The water seeping over the top of your wellingtons should tell you that you have waded in too deep.

Thanks (0)
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By andy.partridge
18th Jul 2018 17:20

Dear Nick
What you have posted is drivel and a dangerous example of DIY accounting. Sorry.
Love and kisses

Thanks (1)
RLI
By lionofludesch
18th Jul 2018 17:33

Jaysus !!

You're a subcontractor and you've gone for Sage ??

That was an early error.

I'd say your first but there are probably more.

This is outside your skill set. Get an accountant or cease trading.

Thanks (0)
avatar
By eventgroup
18th Jul 2018 17:52

Hi

ok this is the situation.

The company didn't trade in the first year it was just being put in to place so had costs but i didnt draw anything.

It has only recently taken on customers now its in its second year and my question relates to now that it can pay something.

the custom I have at the moment is barely enough to cover the costs a pay a little toward the huge amount of my time its taking as im doing the work myself to get things started.

I am aware my accounts are late it has been due to a hard drive failure that has meant ive had to rebuild the data on everything.

I want to keep my own accounts and use sage so as to do much of the work and then have an accountant for the final expertise to save costs at the moment.

I am self employed but as a separate thing trying to build up this limited company so as to at some point pay myself a PAYA wage but custom is too up and down at the moment to allow that.

Thanks (0)
Replying to eventgroup:
RLI
By lionofludesch
18th Jul 2018 18:06

I still think you need an accountant now.

1. You don't have to pay yourself the same wage every week/month/quarter/blue moon. It can vary. So your excuse for not paying yourself under PAYE doesn't hold water.

2. You can't be a director and send invoices for your work.

3. Sage won't do the work and if you don't keep the records correctly, your accountant will charge you more for his time in sorting out the carp you give him.

Thanks (2)
.
By Cheshire
18th Jul 2018 18:16

The OP has been on another site with this. I suggested he get an Accountant but was called an A hole for my trouble.

Thanks (0)
Replying to Cheshire:
RLI
By lionofludesch
18th Jul 2018 18:22

Thread closed, I think.

Thanks (2)
Replying to Cheshire:
avatar
By eventgroup
18th Jul 2018 19:10

haha yes i've been a busy bee and you pal need to get a life feel like i'm being stalked by you and that does make you an a hole lol... seriously go bother someone else :P why so many haters out there!

Thanks (0)
Replying to eventgroup:
Flag of the Soviet Union
By thevaliant
19th Jul 2018 02:41

1. This forum is mainly for accountants asking other accountants technical questions. As you can see, you get short shrift as a non-accountant looking for free advice. Of course, this isn't your fault but it explains the replies you've got so far.

2. You NEED an accountant. Get a high street chappie, few hundred quid and hopefully sorted (though probably after the end of July). Be aware you are going to be late for your accounts and tax returns already however so be prepared for some fines coming your way.

Thanks (0)
Replying to eventgroup:
RLI
By lionofludesch
19th Jul 2018 08:09

eventgroup wrote:

haha yes i've been a busy bee and you pal need to get a life feel like i'm being stalked by you and that does make you an a hole lol... seriously go bother someone else :P why so many haters out there!

Another satisfied customer ©

Thanks (0)
By Tim Vane
18th Jul 2018 19:25

Just stick everything into 9999 to save time later.

Thanks (4)
Replying to Tim Vane:
RLI
By lionofludesch
19th Jul 2018 08:07

Good idea.

Like it.

Thanks (0)
avatar
By Manchester_man
19th Jul 2018 00:19

I don't see anything that remotely resembles hate being served to you, merely advice that you really should take.

You are already at a higher risk for being selected for enquiry by HMRC and you probably don't even know that you are. (Late accounts as a couple of points to your risk score with HMRC as they associate late accounts / tax returns with people / companies who don't take their accounting / taxation responsibilities seriously, therefore rendering them more likely to be doing something wrong.

Sage 50 for a company that is / has been doing little to nothing is another error.

Save yourself some cash and scrap sage in favour of cloud software (even the free offerings like Quickfile are better than Sage). As a bonus, you won't need to worry about corrupt hard drives as the data will be sitting on a cloud :-)

Thanks (0)
Replying to Manchester_man:
ALISK
By atleastisoundknowledgable...
19th Jul 2018 06:21

“I don't see anything that remotely resembles hate being served to you, merely advice that you really should take.”

Not like that’s ever been said to a layperson OP before.

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By Matrix
19th Jul 2018 07:35

Payments to a Director should be booked to the Director loan account (2301) and reduced by salary or dividends etc when declared. So set up a payroll scheme and cancel the self-employment (unless you need it for other work but why are you running both?).

Also please note that Directors without an employment contract are not subject to the minimum wage.

Thanks (0)
Replying to Matrix:
ALISK
By atleastisoundknowledgable...
19th Jul 2018 08:19

Matrix wrote:

Payments to a Director should be booked to the Director loan account (2301) and reduced by salary or dividends etc when declared. So set up a payroll scheme and cancel the self-employment (unless you need it for other work but why are you running both?).

Also please note that Directors without an employment contract are not subject to the minimum wage.

Didn’t you read the OP, the company can’t afford to pay a salary ... ;)

Thanks (0)
Francois
By Francois Badenhorst
19th Jul 2018 13:21

This thread has been closed. Thanks.

Thanks (0)