Ive just been told by my current Tax people (who are adamant that I cannot pay myself (or anyone else) anything at all if it doesnt go through RTI PAYE) but from what Ive read on line I can still pay myself up to £5824 (£112 p/w) without any need to use the RTI PAYE. I paid myself £5,500 the previous tax year on the same basis and that WAS acceptable but they say the rules changed for last tax year.
I outsource any payroll work but does this sound correct? He can't take Div's so he was hoping to take some salary.
KEY to this is the amount, which you have correct but also the words:- ''gets expenses and benefits, has another job or gets a pension'' which applies to all employees including Directors!
HTH
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Thanks, if he doesn't receive pension/benefits or has other income then I assume he could pay himself up to £112 a week for that year, without having to register for payroll/RTI.
I'm not answering for Tony here John, but you can only take dividends from taxed profits, so if the company is making losses (or bringing losses forward) then there are no reserves to distribute as dividends. You will no doubt prepare many accounts where illegal dividends have been taken and no doubt you sweep these all into the dla. If the dla is overdrawn then there will be a s455 tax liability if it remains overdrawn 9 months after the year end.
I hadn't considered the loss aspect, although I'm aware of the dividend rules. I can do Ltd Company accounts , but I avoid them wherever possible, save for a handful who are small fry and whom I know.
Illegal dividends haven't cropped up yet, although I've read over on ukbf of quite a few cases where dividends have been taken when they shouldn't have been, and the Directors not being aware they shouldn't have been taking them.
I was thinking it might have been an IR35 situation, hence my question. If it was, then the potential client would have to declare all profit as salary (save for the 5% allowance) and therefore the previous accountant would have been correct. I didn't want to assume that was the case though.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
