Director of a company has submitted his own accounts to Companies House. Was late so has been fined.
Now needs a CT 600 submitting to HMRC which is also late!!
He has sent a spreadsheet of his accounts showing income, expenses and money he has drawn for himself.
He has called them Wages and Dividends. Am waiting to find out if he registered his company as an employer but am guessing the answer is going to be no.
What is the best way to deal with these drawings? I am guessing he is also going to need a personal Self-Assessment soon also.
Yes there is profit there. He is looking to go back in to employment so may be closing the business down. He was badly advised and didn't know what he was doing hence the fines etc.
Back with this client problem again. It seems he hasn't registered him company as an employer. How will this be dealt with now? Will he have to register the company as an employer and explain to HMRC why it hasn't already been done? He says he wanted to take the lowest amount possible and the rest in dividends and therefore thought there was no need to register as an employer. Can this kind of thing be backdated? His accounts were YE 30/06/2014.
I am hoping to keep his books up to date going forward as he is not closing the business down just yet.
Hi Elaine
HMRC rules state, even in this day of RTI, that you are exempt from PAYE if your employees are paid less than £111.99 per week as long as they get no other expenses/benefits, have no other job and dont receive a pension. (Payroll records do need to be kept, just not reported)
I certainly have never seen anything to say this doesnt not extend to Director only payroll, nor does it mention anything about divis, so am sure you can go with this. Ive enclosed the link - sparse as the info is.
I know this rule has been used by some businesses for their part time staff, with the issue often in those cases not always knowing if that member of staff gets another job, for example. In this case its easier to ascertain as its just the Director involved. The thing to remmeber is that if he did take on a member of staff earning £112+ then that triggers a need for a proper scheme to be reported in the usual manner - including HIS pay, so it might be worth getting one set up from now to cover off any future issues (especially in light of him now deciding he isnt closing the business down!)
So how would his wages and divis bee shown on his Self-Assessment then? Divi's have a section of their own but where would his income be shown as there would be no p60?
Ah well - now there is the rub I guess. I would say that the 'records needed to be kept' could include the need to produce a manual P60, or the very least have the figures you need taken from a P11 equivalent (which might be the back of a fag packet as long as its kept in the records). To be honest Ive never had a client in this situation, but its clearly an area which HMRC allow for. Interested to open it up to any others to hear of anyone who has tried this one before?
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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
