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Failure to notify RTI for the only payday in 17-18

New company formed 07 17. No PAYE scheme opened yet.

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A client from way back approached me a few weeks ago to act for his company which was formed in July 17. No PAYE scheme opened yet. Turnover £8.5K to 5 April 2018 and most of it taken out for own use. If I treat as dividends then CT liablity of £1.6K as expenses minimal. No problem treating it as salary as he has full PAs. If I treat as loans and put through as salary as of 5 April 2018 then late RTI notification and potential penalty although possibly treated as first failure for 2017-18? Any thoughts please?

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RLI
By lionofludesch
28th Aug 2018 18:44

It's too late to backdate a salary to April.

The boat has been well and truly missed.

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Replying to lionofludesch:
By Ruddles
28th Aug 2018 19:30

It’s also too late to “treat as” dividends :)

They were either dividends or they weren’t. My money’s on the latter.

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Replying to Ruddles:
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By GamekeeperTurnedPoacher
28th Aug 2018 19:50

Fair enough!

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By GamekeeperTurnedPoacher
28th Aug 2018 18:56

Thanks, much appreciated!

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By GamekeeperTurnedPoacher
28th Aug 2018 18:56

Thanks, much appreciated!

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Euan's picture
By Euan MacLennan
28th Aug 2018 20:54

Or ... you could get real!

Discuss with the client and agree that he meant to take the money as salary.

Although I normally take the "correct" line, in this case I would register online for PAYE using the appropriate structured e-mail, citing 31st March 2018 as the first pay date. When you get the PAYE references, file an FPS for 2017/18 Month 12 and notify HMRC that it is the final submission for the tax year. Technically, a penalty is due for the late filing of the final RTI submission for the year, but I have never heard of HMRC imposing the penalty when no PAYE is due, which seems to be the case from your question.

Charge your client an appropriate fee for your skill!

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Replying to Euan MacLennan:
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By GamekeeperTurnedPoacher
28th Aug 2018 21:54

Thanks, Euan,
That had been my plan but I wanted some thoughs on the matter. Before hearing from you I had received a few negative responses. As far as RTI is concerned my client will have had no notion, no excuse of course, because when he was last a client he acted precisely as he has done now when operating via his previous company and that was more than 10 years ago.
Really appreciate your comments!

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Replying to Euan MacLennan:
By SteLacca
29th Aug 2018 08:15

Borderline - there may be an NI liability.

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By ireallyshouldknowthisbut
29th Aug 2018 10:29

Seeing as this ought not be a ltd co in the first place (which a spanner for an £8k t/o!!!) , have you considered if they are actually trading as a limited company, or done the "take no advice, just form a limited company" and are actually trading as just them with a trading name? Seen heaps of these just running it through a private bank account and no mention of the company anywhere.

if so no returns of any kind needed other than dormant accounts and possible an SA if NI threshold breached.

Just a thought!

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Replying to ireallyshouldknowthisbut:
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By GamekeeperTurnedPoacher
29th Aug 2018 15:56

Thanks but perhaps you assume too much. He does have a bank account in the name of the company into which the turnover has been paid. If the contract which the company had from the outset had remained in place the fees for first year wiuld have been £20K+. Arguable still not worth having a company? Perhaps! Be that as it may. I still have to solve these problems.

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