Share this content

No PAYE Scheme

No PAYE Scheme

A new client thought they were paying themselves wages in the 2010/11 tax year, but hadn't set up a PAYE scheme, they were paying below the tax threshold so no tax would have been due. Is it possible to set up a PAYE scheme for the 2010/11 tax year now?


Please login or register to join the discussion.

06th Dec 2011 12:31

Yes - it is possible

... but you would have late filing penalties when you submit the long overdue 2010/11 P35 & P14.

The tax threshold (£6,475 in 2010/11) is irrelevant as it is above the NI threshold (£5,715) at which NIC would become payable and indeed, both are irrelevant because you need a PAYE scheme for salaries above the NI Lower Earnings Limit of £5,044 in order to claim the free NIC by submitting the P35 & P14 at the end of the year.

I would suggest that you restrict the wages to (say) £5,000 and treat any excess as a loan, perhaps covered by a dividend.

Thanks (0)
By maxmadx
07th Dec 2011 02:51

Could be possible.

Thanks (0)
Share this content