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Directors Drawings and PAYE

Directors Drawings paid on an ad hoc basis. Not yet registered for PAYE or RTI.

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Our client is a micro-business with 4 directors, they are in there 1st year of trading and have been drawing money from the company's profits as and when needed over a 5-month period. As the company has not yet registered for PAYE / RTI there is likely to be fines and interest due when they do register.

We are wondering if anyone else on accounting web has come across a similar situation and if there is anyway of minimising any potential fines, etc.

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By Matrix
07th Nov 2019 12:50

*their

If you are going to charge for payroll services then I suggest you swot up on Directors’ earnings periods first or pass this to someone who knows what they are doing. Otherwise your client would be paying unnecessary fines.

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By tonycourt
07th Nov 2019 13:06

Are you sure that they have not drawn some or all of the money as loans?

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Replying to tonycourt:
Bramble
By Chris.Mann
07th Nov 2019 13:36

Crikey, while we're in this giving mood, could an element, of these withdrawals, have been dividends? Albeit not correctly administered?
Sounds to me like this "client" needs the proverbial rocket up their (*****).

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Replying to Chris.Mann:
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By tonycourt
08th Nov 2019 15:47

But, as AW members like to point out (correctly) a dividend isn't a dividend unless it is. That is, if a director-shareholder doesn't think that he or she has taken a dividend at the time they decide to draw the money then it isn't a dividend..... you can't rewrite history. More likely to be a loan than anything else.

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By JDBENJAMIN
08th Nov 2019 15:22

We all know what happens in these circumstances. All the money is treated as loans to the DLA, which is later 'repaid' with net salary and dividends at the year end.

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