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Paye registration threshold

Paye registration threshold

Didn't find your answer?

I have a ltd company and I'm the only director of the company. The company start trading since March this year, but I haven't register for paye, could any one explain how much salary should I pay myself to avoid paye registration ? Also as I'm the director of the company I don't need to register as self employed, is tha correct ?

Replies (31)

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Euan's picture
By Euan MacLennan
17th Nov 2013 15:23

You need your own accountant

... to explain these basic matters to you.

You don't need to pay yourself a salary.  If you pay yourself less than the NI Lower Earnings Limit (£473 a month in the current tax year, 2013/14) and you have no other job, your company does not need to register for PAYE.

As a director of your company, you are treated as an employee of the company and are not self-employed.

Thanks (3)
Replying to nodhedz:
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By Nafiz
20th Nov 2013 17:24

You need your own accountant

Thanks for the explanation. but as a director I have to do self assessment every year, don't I ? Since I have start paying myself from March, I suppose I have to submit return by Jan 2014 for one month pay ? Also I can use my remaining personal allowance (after deducting £473 x12=£5676) once receive dividend from company. 

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Stepurhan
By stepurhan
20th Nov 2013 17:30

Euan does not need an accountant

Directors are not required to submit self assessment tax returns automatically. HMRC will quite often request one anyway. You don't have to ever start paying yourself. When to start paying yourself and how much is something that a good accountant can advise you on. Thinking you can only get dividends up to any remaining personal allowance is also a notion that a good accountant can disabuse you of.

Your copying of Euan's title makes it look like you are questioning his answer. If so, I would point out you've asked a question and got a reply from someone who has proven their knowledge time and again. Perhaps you should show some respect when they freely share some of that knowledge with you, rather than abusing them from your own misunderstanding of the facts.

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Replying to Guilford Accounting:
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By Nafiz
20th Nov 2013 17:47

Euan does not need an accountant

Off course I do respect Euan's advice and appreciate.This site meant to share knowledge and expertise not siting down on desk and make this kind of comment "abusing them from your own misunderstanding of the facts". Perhaps you need to change your boorish and condescending perception towards others before you comment on some one. 

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Replying to Guilford Accounting:
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By Nafiz
20th Nov 2013 17:49

Euan does not need an accountant

stepurhan wrote:

Directors are not required to submit self assessment tax returns automatically. HMRC will quite often request one anyway. You don't have to ever start paying yourself. When to start paying yourself and how much is something that a good accountant can advise you on. Thinking you can only get dividends up to any remaining personal allowance is also a notion that a good accountant can disabuse you of.

Your copying of Euan's title makes it look like you are questioning his answer. If so, I would point out you've asked a question and got a reply from someone who has proven their knowledge time and again. Perhaps you should show some respect when they freely share some of that knowledge with you, rather than abusing them from your own misunderstanding of the facts.

Off course I do respect Euan's advice and appreciate.This site meant to share knowledge and expertise not siting down on desk and make this kind of comment "abusing them from your own misunderstanding of the facts". Perhaps you need to change your boorish and condescending perception towards others before you comment on some one. 
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By carnmores
20th Nov 2013 17:53

i would have thought that it was obvious that OP

was just copying in Euans title as a reference link, come on give him a break. Euan is just magnificient and he is in my favourite 3 posters .

a point that has not been mentioned is that (correct me if im wrong Euan)  if you do not have a PAYE schem then you wont get credited with NI contributions if your pay falls below the lower level 

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Replying to lionofludesch:
Euan's picture
By Euan MacLennan
21st Nov 2013 10:41

FOC NIC

carnmores wrote:

a point that has not been mentioned is that (correct me if im wrong Euan)  if you do not have a PAYE schem then you wont get credited with NI contributions if your pay falls below the lower level 

You will only be credited with NI contributions for the purpose of qualifying for the state pension in later life if all three of the following apply:

the company has a PAYE scheme, andthe employee's pay is at or above the NI Lower Earnings Limit (£473 a month in 2013/14), andthe company files monthly FPS reports under RTI so that HMRC knows that the employee is entitled to the free NI contributions.

 

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Replying to lionofludesch:
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By Nafiz
21st Nov 2013 19:00

i would have thought that it was obvious that OP

It wasnt meant to show him any disrespect. Perhaps he is the only one answer my question with out any nuisance !!!

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By young ronaldo
20th Nov 2013 18:00

Nafiz

This site is for accountants to discuss accounting issues with other accountants. It is not for members of the general public to seek free advice. If i had a plumbing issue, i would engage a good plumber. I would not go on a plumber's forum in the hope of gleaning a few morcels of advice and then attempt to solve it myself.

Here's a morcel anyway though - have you considered what you are going to do for a pension in later life - because your current strategy isnt addressing that issue.

*carnmores seems to have thrown you the same morcel whilst i was typing. Go see an accountant Nafiz - you should be able to source one that will more than justify his fee.

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Replying to lionofludesch:
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By Nafiz
21st Nov 2013 18:52

yong Ronaldo

Really !!! your think accountants are not member of general public, so what are they ??? If so I am not fully general member of public, as I am a PQ accountant.

A plumber doesnt have to go through 14-15 exam and training on complicated ruels and regulation, however I dont know any plumbing forum can help in a way this blog can. Some one who doesnt have any knowledge about accounts and finance woudnt usally ask any question here !!! 

To clear your MORCEL, I do know what I will do with my pension plan and your strategy of addressing others strategy clearly not working here. If you think you are a good accountant and have wealth of experience you shouldn't worry about if some one getting a free advice here……rather focus on getting more client…..

 

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Replying to atleastisoundknowledgable...:
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By tom123
24th Nov 2013 09:05

Not quite true.

Nafiz wrote:

A plumber doesnt have to go through 14-15 exam and training on complicated ruels and regulation, 

May I respectfully mention the Gas Safe register - which involves practical and written assessments. Given the consequences of getting something wrong can result in houses exploding and worse - .

Yes, the training is different - but it does take time and skill to get through - just different types of skills.

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Replying to Matrix:
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By Nafiz
24th Nov 2013 21:31

Indeed
Yes I do accept your argument but most of the plumber are not register like not all accountants are chartered qualified. But I do respect all professionals, it's not quite right to compare apple with orange which our fellow blogger did !

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By carnmores
20th Nov 2013 18:16

@young ronaldo

absolute rubbish , but given your sensational display last night you are forgiven even if it wasnt you .

this site is for everybody

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By young ronaldo
20th Nov 2013 18:45

Carnmores - Every day i feel the pain of him leaving Old Trafford :(

"About us

AccountingWEB.co.uk is the largest independent online community for accounting and finance professionals in the UK - providing award-winning content and online engagement between members in a true community environment.

Accountants in Practice represent just under half of our visitors and we reach 75% of firms outside of the top 20.

Accountants in Business represent the remainder of our audience, typically working in smaller to mid-tier businesses."

IT ISNT A FREE ADVICE SERVICE TO THE GENERAL PUBLIC IMO.....

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By Chris Smail
21st Nov 2013 01:25

There are other forums run by sift.

I would recommend http://www.ukbusinessforums.co.uk/forums/ where there is a wealth of inaccurate and ill-informed opinion on accounting and taxation matters posted by those who believe that accountancy and taxation advice is not worth paying for.

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By carnmores
21st Nov 2013 18:12

THANK GOD FOR EUAN

yes i shouting  @step - no worries i was having a bad day

@young ronaldo - noted but in practice its not the way it works , if some one asks a question simply leave it alone if you dont want to answer

christaiano is so wonderfully gay , he must win the Baloon d'Or non? 

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Stepurhan
By stepurhan
22nd Nov 2013 08:00

Changed question?

The detail in that question is not how I remember it. Is it possible it has been changed in light of responses?

Regardless, if you are genuninely a part qualified accountant, I think you need to go back to your study books. Even now your question, and some of your other responses, indicate a lack of knowledge in fairly basic areas of accountancy. You have also misunderstood the responses of others on at least one ocassion. Young ronaldo did not ask if you know what you will do with your pension plan but "what you are going to do for a pension". This has a direct bearing on your planned PAYE strategy, independent of any personal pension you may have, but you clearly don't have the knowledge to understand what that is.

I think of this forum as open to all, but with a caveat. The answers on here will often be quite technical in nature. As such, the majority of them will only be understood by accounting professionals. Ordinary members of the public are welcome to post, but 9 times out of 10, "speak to accountant" will be the best they can hope to come away with. A little knowledge is a dangerous thing and implementing accounting strategies without understanding all of the implications can go horribly wrong.

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Replying to Cantona1:
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By Nafiz
22nd Nov 2013 18:19

Changed question?

The response was in line with question that was thrown on me, no doubt about it !!!

If you are qualified by any CAAB bodies or CIMA, you should know they do not teach you about PAYE and Pension plan on their studies, this is something you learn from practical experience. While I do not require your undermining prejudice about my knowledge and qualification as well as understanding of others question. If your understanding and knowledge is so good you should rather spent that over client than analysing and explaining (misconception) to others. 

I agree understanding of some issue related to HMRC are technical who doesn't have any knowledge of finance and accounting, but you do not have to be a qualified accountant to understand those neither an accountant require a new language to converse each other. I suppose you woudnt mix accountants with book-keeper or payroll. 

 

 

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By Edward Debris
22nd Nov 2013 22:33

When is an apology not an apology?

When it is a lecture.

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By Siany
23rd Nov 2013 16:54

RTI

Has nobody considered RTI?  All payments regardless how little, should now be reported via RTI.  Therefore a payroll should be set up???

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Replying to tom123:
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By Siany
23rd Nov 2013 21:01

RTI

I think you will find that RTI requires payroll reporting is necessary in all circumstances where wages are drawn.  Also, the tax consequences of rporting a payroll for a director at the level of £640 per month is not only tax deductible against corporation tax, but also credits the ni contributions to qualify for state pension>

Easy enough to operate via the HMRC CD Rom.  No payroll fees need to be incurred down this route.  With Respect!

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Stepurhan
By stepurhan
23rd Nov 2013 19:35

Please stop copying titles

It's a very irritating habit, like a child that repeats everything you say just to annoy you.

The good advice still stands, get an accountant. If you are part-qualified, you would normally be training with a firm that would give you the practical experience to cover these areas. If that is the case with you then I suggest asking one of your seniors or the payroll department to help you with this. If you are studying independently, then this is going to severely limit your career, as most qualifications require post qualification experience to get a practicing certificate.

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Replying to Tim Vane:
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By Nafiz
24th Nov 2013 21:38

Thanks
First thanks for a positive and generous explanation which not most of the people do here rather lecture....any way I'm clear about this but issue is if I register my company now under paye scheme while I'm operating since March 2013, how shall I post backdated salary of director if take £641 I.e. Above LEL, for this instance I suppose taking £473 as a salary would be appropriate to avoid registration or do you have any other generous and constructive advice ?

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Stepurhan
By stepurhan
25th Nov 2013 07:57

No PAYE scheme no pay above LEL

You cannot pay yourself a backdated salary above the LEL before March 2013. You did not have a PAYE scheme in that tax year, and therefore you cannot have made payments above the LEL in that tax year. Indeed, if you tried to retrospectively say that you had, you would now be in the position of having a severely overdue P35, with attendant penalties for that.

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Euan's picture
By Euan MacLennan
25th Nov 2013 10:23

Set up a PAYE scheme now

I agree that it would be too costly in penalties to seek to backdate a PAYE scheme to 2012/13 and it would be ineffectual to have just one month's pay at or above the LEL.  Please note that pay at the NI LEL (£464 in 2012/13, £473 in 2013/14) is sufficient to qualify for the state pension (if paid for a full tax year) and hence, to require a PAYE scheme.

You can however set up a PAYE scheme now and pay yourself at anywhere between £473 and £641 a month for 8 months (£3,784 to £5,128) in November.  As a director, your NIC are calculated on an annual earnings period and assuming that you have no other job, the standard tax code of 944L (£787 a month) is applied on a cumulative basis, so processing 8 months' pay in November would not be subject to any PAYE deductions.

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Replying to Mr_awol:
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By Nafiz
25th Nov 2013 22:19

Agreed
Thanks. You are a star.
I suppose registering for PAYE scheme won't require for RTI as small business (revenue under £50k) just year end return of P60 and P35 ? Also no fine for late register ?

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Replying to Mr_awol:
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By Nafiz
29th Dec 2013 01:20

PAYE Registration

Just tried to register for PAYE scheme according to your advice but its asking for first date of pay, what date shall I mention ? as you advice me to pay all 8 months (£3,784 to £5,128) in November, therefore assuming November 2013 ? 

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Replying to Mr_awol:
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By twickers
18th Mar 2016 20:39

Euan MacLennan / one post

Euan MacLennan / one post referred to as a him-  very attractive him ?-

no one has mentioned the fraud in claiming a deduction for corporation tax/ by way of salary- which is apparently not declared ? except if Dir S/a

it is a pity more attention is not paid [though referred occassionally in posts-  to directors best interest- rather than nhi

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Stepurhan
By stepurhan
26th Nov 2013 07:43

RTI requirements

There is no year end form P35 under RTI.

Any pay at or above LEL. PAYE scheme required. RTI reporting required for all employees. National Insurance record created.

All pay below LEL. No PAYE scheme required (if all employees have no other PAYE income). RTI reporting not required. No National Insurance record.

Turnover has nothing to do with it.

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blue sheep
By NH
26th Nov 2013 08:59

so to sum everything up

You need your own accountant....

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Stepurhan
By stepurhan
29th Dec 2013 08:33

Advice unchanged

Regardless of whatever qualifications you may have, you clearly do not know enough about PAYE to handle it correctly. Take the advice that has been repeatedly given to you on this thread and pay for someone who can. With a simple single director payroll scheme you should find it does not cost a lot. Continuing to try to do it yourself and screwing[***] up because you don't really know what you are doing is likely to cost a lot more.

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