Hi - I have a client who was running his business as a limited company until December 2012 when he decided to dissolve the company and become a sole trader. His accountant at the time told him that as the company was going to be dissolved he didn't have to produce any accounts (the year end was 31st March). It now transpires that the company wasn't officially dissolved until mid April 2013, and HMRC are now asking for his company tax return for the year to 31st March 2013. The problem we have is that his accountant used to put through his directors remuneration each year in March but this wasn't done in 2013 as it wasn't deemed necessary, my client believing there were no accounts to file. Is there any way that the remuneration can be backdated for my client - for 2012/13 it would have been £7488.
No the company wasn't insolvent. Regarding the fine, if my client saves the corporation tax on £7488 (£1497.60) then surely it will be worth the penalty for late filing? Currently, he has not used his personal allowance for 2012/13. We may be able to argue the case, however, as my client has been trying to ascertain if he needed to prepare accounts or not for the last few months and nobody at HMRC would provide him with a definitive answer. In fact, he was told on more than one occasion that there would be no need to produce accounts. Eeek!
If you put £5560 through, its below the LEL, so there would have been no need for a PAYE scheme.
I was under the impression that up to 2012/13, before RTI rules came in, you could give a wage up to £7400 and there were no need for a scheme, but back then I worked for a firm with a payroll department.. so they may have been completing a P35 for that amount. I was hoping someone would confirm this
Worse case scenario, you are stuck with £5560 but its better than a kick in the teeth
I was always under the impression that there still needed to be a scheme in place even if one only returned zero payments. That way the P60 could be tied back to the self assessment.
Thats certainly the approach that I've always adopted but whether that is actually correct I don't know. If not, at least its on the right side of incorrect.
As for kick in the teeth... I always used to use the phrase "better than being hit around the head with a wet fish" but having had the misfortune to having to use a telephone box in London due to a flat battery on the mobile I now realise that there are people out there who actually pay for that service.
kind regards,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
As for kick in the teeth... I always used to use the phrase "better than being hit around the head with a wet fish"
Now you're just being kinky
The current rules allow for no scheme, if its the bog standard code and below the LEL, with no other job... and there was a definitely a situation like that in place, before RTI.. its just the reporting level I suddenly feel unsure of.. I'll email my payroll guru - she will know.
