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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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.
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.
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
FOC NIC
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.
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.
Not quite true.
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.
@young ronaldo
absolute rubbish , but given your sensational display last night you are forgiven even if it wasnt you .
this site is for everybody
Carnmores - Every day i feel the pain of him leaving Old Trafford :(
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IT ISNT A FREE ADVICE SERVICE TO THE GENERAL PUBLIC IMO.....
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.
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?
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.
RTI
Has nobody considered RTI? All payments regardless how little, should now be reported via RTI. Therefore a payroll should be set up???
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!
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.
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.
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.
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
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.
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 [***] up because you don't really know what you are doing is likely to cost a lot more.