Self assessment for director with no company PAYE

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Hello

I could really do with some advice as my accountant is contradicting what someone at HMRC has said but a second time contacting HMRC confirmed what the accountant said.

I am the sole director of a limited company with no employees. I did not register the company for PAYE because I didn't intend to pay myself more than £116 per week which is confirmed here: https://www.gov.uk/paye-for-employers

My personal and business accounts are managed by a single online banking account. There was one occasion in March this year (while I was unwell otherwise I wouldn't have been careless) where I had accidentally transferred £1,000 from my business account to my personal account when I meant to transfer from one personal account to another.

The total amount paid to my account between April 2017 to April 2018 is £3,000. I don't know if the £116 per week is literally no more than £116 per week or if you can do 116 x 52 = £6,032 and make sure in that year no director was paid more than £6,032. Is this accidental payment ok to not have to register for PAYE or should I consider that £1,000 a directors loan and pay it back? Corporation tax told me to ring employers helpline, employers helpline told me to ring corporation tax and then when I spoke to corporation tax again, they told me to call self assessment helpline.

So now when filling in my self assessment, am I supposed to enter my company as an employer since it's under the threshold/has no PAYE? One person at HMRC said no and I should count earnings as self employment. Another said yes but when asked to enter a PAYE, use NONE. So which is it?

If I have to consider £1,000 as a loan, is this included or excluded as part of my earnings on the self assessment?

 

Replies (9)

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By lesley.barnes
18th Nov 2018 10:42

What has your accountant suggested? I would have though this was a DL rather than pay or a dividend because you are trying to classify what it is after the event. It isn't part of your earnings.

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By lionofludesch
18th Nov 2018 12:47

If the £1000 was genuinely paid in error, you simply need to repay it.

Why haven't you done so already ? It casts doubt on your assertion that this was accidental.

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Replying to lionofludesch:
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By MichaelRoss78
18th Nov 2018 13:04

I have been unwell, in an out of hospital or bed ridden for 3 years. The transaction happened when I was on pain medication and any moment after that where I felt well enough, I went straight back to working and trying to finish work that was approaching deadlines or already late so I never had a moment to realise it went. I just didn't have the mental capacity to think about it. I am doing a years worth of bookkeeping in the last few days so I only noticed the transaction now. I'm fully aware being unwell doesn't excuse the mistake in the eyes of HMRC, I'm just telling you I was not in the right mental capacity when it happened and why it went unnoticed for so long.

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By lionofludesch
18th Nov 2018 13:17

I'm sorry to hear about your illness and I'm not unsympathetic.

However, you know about it now and, apparently, it remains unpaid. Repaying it would strengthen your case and - probably - help you avoid a s455 charge of 32½% or more.

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Replying to lionofludesch:
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By David Heaton
19th Nov 2018 11:56

Isn't £1,000 a little way below the de minimis for s 455? The logical approach would surely be to just reverse the transaction that was made in error: it couldn't have been earnings unless it was intended as, or became, a reward for being an employee/director.

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By andy.partridge
19th Nov 2018 11:59

What do you think is the de minimis?

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By lionofludesch
19th Nov 2018 12:24

I vote £0.01.

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By andy.partridge
19th Nov 2018 12:31

Carried.

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By Moonbeam
18th Nov 2018 16:32

Always assume if you ask anyone at HMRC you have a good chance of getting duff information.
Your accountant ought to be on the ball.

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