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Maximum salary when PAYE reg’n is not required

Thanks in advance for your kind reply.

Didn't find your answer?

Thanks in advance for your kind reply.

The pay I set for myself is £6k pa and I'm not registered for PAYE.  I hired an accountancy firm that advised me to declare that I paid myself £9k instead.

I wanted to know if this was common advice.  Is this okay even when I wasn't (and still not PAYE registered)?

 

Thank you!

 

Replies (32)

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RLI
By lionofludesch
21st Nov 2020 16:07

Hard to say - given that you give us less than the minimum required information.

Do you have another job ?

What's your object ? Less form filling and less pension ?

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Replying to lionofludesch:
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By director1234
21st Nov 2020 16:14

Thanks for your reply.

I’m really enquiring about observing the PAYE registration rules stating:

“You do not need to register for PAYE if none of your employees are paid £120 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.“

I did not pay myself £9k and if I did, I’d have needed to be PAYE registered. With HMRC stating penalties for not being PAYE registered if pay was over £120 per week, I wondered why the accountant would advise declaring £9K? Wouldn’t that put me in jeopardy of getting fined?

I hope this makes sense. I’m not knowledgeable at all so insight would be helpful. Thanks again.

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Replying to director1234:
RLI
By lionofludesch
21st Nov 2020 16:17

If all you're wanting is to avoid penalties, carry on as you are. You're grand.

No need to answer my questions.

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Replying to lionofludesch:
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By director1234
21st Nov 2020 16:19

I’m not following but thanks for your time.

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Replying to director1234:
RLI
By lionofludesch
21st Nov 2020 16:29

director1234 wrote:

I’m not following but thanks for your time.

I can give you a better answer if you answer the questions.

No obligation on your part, obviously.

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Replying to director1234:
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By Paul Crowley
21st Nov 2020 16:19

Get a new accountant
Your accountant is suggesting fraud

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Replying to Paul Crowley:
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By director1234
21st Nov 2020 16:21

Thanks so much.... as a non-accountant, I am gathering info on what is the “done thing” in the industry. Thanks again

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Replying to Paul Crowley:
RLI
By lionofludesch
21st Nov 2020 16:34

Paul Crowley wrote:

Get a new accountant
Your accountant is suggesting fraud

Fraud ?

In what way, exactly ?

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Replying to lionofludesch:
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By director1234
21st Nov 2020 16:53

HMRC says register for PAYE unless the salary is less than £120 a week (and other criteria that I don’t meet- no second job). I’m confused as to why I would retrospectively declare paying myself £9k pa (PAYE reg required) and be liable for penalties. I’m sure it’s sound moving forward, but is it sound advice retrospectively? That was my question. I wasn’t questioning the basis of his advice but more so the observance of the rules. Is HMRC not strict on this rule? Is this what I’m missing here?

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Replying to director1234:
RLI
By lionofludesch
21st Nov 2020 16:53

Yes. The need to answer my questions.

I don't intend to drag it out of you. But you haven't given enough information to provide a sensible answer.

Up to you. I won't ask again.

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Replying to lionofludesch:
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By director1234
21st Nov 2020 17:04

Apologies, you probably replied before I edited my reply above... I have no other jobs and I’m not sure what objectives I should have. I’m simply wondering why an accountant would tell me to put in my c orp tax return that I paid myself £9k when
I only had records that I paid myself £6k for that previous year. Moving forward, makes sense. Retrospectively, it doesn’t.

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By Paul Crowley
21st Nov 2020 16:16

Get a new accountant
I could easily explain the most tax efficient and pension qualification rules in probably 10 minutes.
If the person you appointed cannot, you picked the wrong person

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Replying to Paul Crowley:
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By director1234
21st Nov 2020 16:24

I’m sure the accountant was looking out for the best tax position for the company but it was odd to suggest something that required PAYE reports for the previous year when I wasn’t rgistered.

Thanks again.

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By Paul Crowley
21st Nov 2020 16:26

I assume you are not British and do not want to get a British pension
Your Dumb accountant does not look to correct that problem
Get a properly UK qualified accountant to explain why both you and your accountant need to change what you are doing

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Replying to Paul Crowley:
RLI
By lionofludesch
21st Nov 2020 16:43

Paul Crowley wrote:

Your Dumb accountant does not look to correct that problem

Au contraire.

The accountant offers sensible advice.

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By Paul Crowley
21st Nov 2020 16:36

I think you are the one not understanding
Get a PAYE scheme open and qualify for pension

I think you did not take notes and did not understand what that the accountant explained.
Did he mean
a start doing it properly? or
b prepare fraudulent accounts for last year?

If you have been doing the accounts yourself then clearly what you are doing will not be best practice

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By Paul Crowley
21st Nov 2020 16:39

The title of your question does not make sense
You know answer

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By Paul Crowley
21st Nov 2020 17:07

Not having a PAYE scheme, but putting £9,000 as dirs rem in accounts is not correct

'The pay I set for myself is £6k pa and I'm not registered for PAYE. I hired an accountancy firm that advised me to declare that I paid myself £9k instead.'

PAID in the PAST

What does declare mean?
On a proper PAYE scheme stating from today or the figure put on all the other forms to reduce tax?

This is not a new company in it's first year

But probably the first time an accountant involved

And client thinks the advice given is not to be trusted
If advice is tax evasion, then get new accountants
If advice is start a PAYE scheme the OP really should have said that.
Declare does not sound anything like start a PAYE scheme

£9,000 means paying NI. Clearly no NI paid to date

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Replying to Paul Crowley:
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By director1234
21st Nov 2020 17:06

What I meant by “declare” was to put in the corporation tax return that director’s pay was £9k instead of the actual £6k I paid myself (which I carefully recorded throughout the financial year in question).

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Replying to director1234:
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By Paul Crowley
21st Nov 2020 17:12

I do not think that is what Lion understood

That is EVASION
Pay £6k but claim £9K

Get an accountant that complies with the law and PCRT

Why get caught for such a tiny tax fraud?

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Replying to Paul Crowley:
RLI
By lionofludesch
21st Nov 2020 17:29

Paul Crowley wrote:

I do not think that is what Lion understood

Partly because he never said.

Agree you can't rewrite the past. Adjustment for 2020/21 and later years is grand - he's a director.

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Replying to director1234:
RLI
By lionofludesch
21st Nov 2020 17:12

Well -again - you don't specify any dates so it's hard to say whether there's any impropriety here. Nothing wrong with declaring a bonus any time in the next four months if we're talking about the current year.

As you've now said that you have no other job, I will say that any year where your income is below £120 a week on average (2020/21 rates - other years will be slightly different) won't count towards qualification for your state pension when you get to sixty-whatever-it-is-by-that-time.

This may or may not bother you. It does, however, bother most folk.

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Replying to lionofludesch:
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By director1234
21st Nov 2020 17:21

Cheers you’ve been quite helpful. Appreciate your time..

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Replying to director1234:
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By Youareatit
22nd Nov 2020 12:20

director1234 wrote:

Cheers you’ve been quite helpful. Appreciate your time..

Only 'quite' helpful. For real.

You got free info.

Free info whilst having to drag info out of you to answer the question/not answered all questions.

Why didn't you just ask your Accountant why he was suggesting such things.

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Replying to lionofludesch:
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By memyself-eye
22nd Nov 2020 12:13

It does (bother most folk) but not until it's too late to do anything about it!

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Replying to Paul Crowley:
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By director1234
21st Nov 2020 17:20

Thank you for this. I have more info to investigate further.

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By frankfx
21st Nov 2020 19:00

Is your accountant qualified?

A firm suggests yes.

But who did you speak to?

Ask the firm about national insurance.

And the £nil you may pay when you take on a little red tape paperwork.

But still be part of the pension and other state benefits club.

Yes,Some thing for free!

But you have have do ' something 'for it.

There is an elephant in the room, but it appears that it's presence has been ignored.

Why?

Let us know how your conversation with your accountant progresses.

I look forward to a posting on Monday 23 November.

Thanks (1)
Replying to frankfx:
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By I'msorryIhaven'taclue
22nd Nov 2020 12:49

frankfx wrote:

There is an elephant in the room...


..and a lion!
It's a regular zoo in here.

frankfx wrote:

Let us know how your conversation with your accountant progresses.

I look forward to a posting on Monday 23 November.


Do you think he'll get an appointment that quickly?
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Replying to I'msorryIhaven'taclue:
RLI
By lionofludesch
22nd Nov 2020 13:00

I'msorryIhaven'taclue wrote:

frankfx wrote:

There is an elephant in the room...

..and a lion!
It's a regular zoo in here.

And a dragon and two dugs.

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Replying to I'msorryIhaven'taclue:
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By Paul Crowley
23rd Nov 2020 00:25

A phone call possible

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My photo
By Matrix
23rd Nov 2020 06:20

No you can’t just put the £9k through.

You sound like you have integrity so don’t change £6k to £9k and just do it properly going forward.

If you were that worried about your NI record you would have engaged an accountant sooner. No idea why Lion and your accountants are so bothered about it when your clearly weren’t.

Set up a PAYE scheme, file the monthly RTI, pay the NI prospectively.

If you don’t trust your accountants then change, maybe someone on here will PM you to offer their services.

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Replying to Matrix:
RLI
By lionofludesch
23rd Nov 2020 14:18

Matrix wrote:
No idea why Lion and your accountants are so bothered about it when your clearly weren’t.

Ignorance is, of course, bliss.

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