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reversing payroll for the whole year

reversing payroll for the whole year

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Not sure if this can be done but any inputs will be appreciated.

I maybe taking over a small client whose previous accountants have not taken care of them and in fact when they complained about the service they were told you should find another accountant. Anyway, while going over the accounts and there is a lot to sort out.  I noticed the director taking a monthly salary and paying PAYE and employers National Insurance (over and above the personal allowance)  The Director has also lent the company a vast sum of money in the last few years.  

The Company has around 100K of losses to offset against future profits and expect it will take around 3-5 years to fully utilise these losses.  The company has never been in profit since it was set up 5 years ago.

The Company's immediate priority the moment is cash and wondered if there was anyway of reversing the payroll for the last two years (or maybe one year) and claiming back the tax and NI and treat the payment to the director as a repayment of the directors loan ?  

The Director has filed a tax return for 2012/13 but not yet for 2013/14

Replies (6)

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By johngroganjga
03rd Jul 2014 05:34

No you can't re-write history. You can advise client to do things differently in future but you can't undo the past.

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By bernard michael
03rd Jul 2014 08:57

If the client is in such poor shape after 5 years perhaps he/you ought to consider whether the business will ever be viable or is he just pouring good money after bad. Perhaps a discussion with an IP might help or an expert in the business he's trying to be in

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By Jim100
03rd Jul 2014 14:50

Reverse payroll for 2014/15

Is it possible to reverse the payroll for the months of April'14 and May'14 ? 

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By hkfinancials
03rd Jul 2014 16:11

Why reverse?

There is no need to reverse the wages for April and May. (In fact under the RTI system it is not even possible). Why not reduce the wages going forward. May be no salary for June and July (I do not know the amounts involved so might be a bit vague here).

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By DMGbus
03rd Jul 2014 16:45

Reversal of (revision of) 2013/14 payroll

The mechanisim to put right erroneous RTI filings for 2013/14 is to use HMRC Basic Tools to file an EYU (earlier year update).

This is ONLY a possibility if there was a genuine error.

Genuine error: lack of communication between accountant and client...

# Accountant ran the payroll and WITHOUT AUTHORITY "did his own thing" and ran figures that were NOT APPROVED &/or NOT AUTHORISED by the client

# Arithmetic error in computing gross pay by accountant or payroll bureau

# Poor understanding of RTI and as a result filing incorrect figures

# Incorrect operation of software (eg. mistakenly inputting cumulative instead of incremental figures)

# Incorrect operation of payroll, eg. filing figures that have no bearing on actual money paid out

# Incompetent advisor who thinks that all drawings from a Ltd Co must go through the payroll even if client has said that the drawings were full or part repayment of directors loan account

Is there any EVIDENCE that the client APPROVED the RTI filings?

RTI filings on there own are NOT PROOF nor are they EVIDENCE that salary/wages has been drawn or paid - they are only evidence that HMRC were told this by someone (competent or not) (with or without authority).

Putting right incorrect filings made without authority are NOT changing history but putting right mis-filings.  On the other hand changing things just because the client has changed their mind is NOT ALLOWED as this really would be changing history.



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By carnmores
03rd Jul 2014 17:28

if using moneysoft for example

you can tempoaraily allow refilings and file nil returns fro Apr & May, i presume other software will also but dont know about Basic PAYE tools 

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