I have been running a payroll for a client who is director and sole employee of a limited co. Profits in the last 18mths have meant that the DLA shows an amount owing to the director which is not available to draw on. He has fairly suddenly decided to "retire", and drawn down pensions etc. but didn't tell me. Having earned £7000 this year (but not received the money from the business), and then receiving pensions means that he will pay tax. Are there penalties for re-running the payroll to reflect a lower salary, or is there a method of reflecting the debt on the self assessment return which will mean that the notional PAYE generated will be negated?
You cannot rewrite history. If a salary has been declared through RTI and credited to the DLA then I would not change it unless I had not acted on client's instructions and it was a genuine error. If the Director failed to tell you of his overall tax position and discuss tax planning in advance then, in my view, this is not an error.
The company gets a 20% deduction for the pay, if there are losses then they can be carried back to the previous year. So he would not be out of pocket.
In fact I expect the pension would have been paid with a BR code so he has already received net income, there may be a refund due if he has overpaid.
You cannot rewrite history. If a salary has been declared through RTI and credited to the DLA then I would not change it unless I had not acted on client's instructions and it was a genuine error. If the Director failed to tell you of his overall tax position and discuss tax planning in advance then, in my view, this is not an error.
I can only imagine the potential PI nightmare that could cause! The company gets a 20% deduction for the pay, if there are losses then they can be carried back to the previous year. So he would not be out of pocket.
In fact I expect the pension would have been paid with a BR code so he has already received net income, there may be a refund due if he has overpaid.
It would be useful to be able to return salary - I see the benefit to that.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Fines would probably cost more than the 'notional' PAYE Elizabeth.
Cake and eat it comes to mind, but the concept of re-wind is one Im sure a few dream of, which is in part why HMRC started this RTI malarky - just a shame they dont use it properly at their end, other than an another attempted fee earner for late submissions!
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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
