Off Licence Accounts - Help - The Book-keepers Forum (UK)

AnitaP · Veteran Member

Off Licence Accounts - Help

abacus12345 · Guru

Can't help with code numbers.

DR wages (p&l) gross wages.

DR NIC Employers (p&l)

CR Net wages (B/S)

CR Tax / NIC Control total employers / employees NIC and tax. ----

When paying employee,

DR net wages

CR Bank.

When paying HMRC

DR Tax/NIC control

CR Bank.

-- Edited by abacus12345 on Tuesday 22nd of March 2016 07:08:36 PM

matt123 · Senior Member

Create a bank account and name it Cash Account. Enter the supplier invoice as normal then use the cash account for payment.

Meadowlands · Senior Member

I don;t use sage but would agree with Matthew - set up a cash bank account then you can put the payments etc through that.

Cheshire · Master Book-keeper

AnitaP wrote:
Hi,
I was wondering whether someone could help me.
My client has been providing me all invoices that have been paid by credit card through the business account but, recently they have opted to pay for all purchase bought at cash & carry by CASH. Therefore, how would this be entered on to Sage instant accounts now and how would this be allocated off?
Another question, my client has been making a lot of cash transactions and they have provided me their own working on excel and gave me as a CASH invoice, I have entered this on as a supplier called CASH Invoices, so this goes to code 5000, is this correct method or another method can be used?
My client has been making several payments for WAGES through BACS, how would this be entered onto Sage instant accounts, would this be a Journal Entry - to WAGES expense as I have noticed their are codes for GROSS, NET too? Also, paying HMRC PAYE/NIC again, how would this be entered onto sage?
Any help would be much appreciated?
Thanks

Hi Anita

Advise your client you need source documents. Their own working on excel could include a pile of personal stuff or any old rubbish.

You could have a 'cash' supplier account as you have set up but then how can you do any analyse of where his purchases are from? You can still set up the regulars as supplier accounts. Then set up a 'cash' Bank account as the other suggest and pay those suppliers in the normal way (via 'supplier' tab in Bank module). For non regulars pay via the 'Bank payment' tab in the Bank module - but again form the Cash account.

Where you code it to is dependent on the spend. Care - some of the cash purchases may not be 5000, eg may be for stationery so you need to code to the stationery expense code (7504...ish, depending on your sage version).

Other issue is - how does he top up his cash levels? If he takes cash out of the Bank then you need to move the funds from his Bank to his cash pot - so use the 'Bank transfer' tab. Otherwise you will have an overdrawn Bank.

Let me know if he uses his own cash before you do any more!!!!!!

Nominals added on Johnny's note re payroll. well they will be in a few minutes!

Cheshire · Master Book-keeper

abacus12345 wrote:
Can't help with code numbers. Care re gross and net - think of your double entry - hint.... some are liabilities you will be reflecting, others the cost to the business
DR wages (p&l) gross wages. in the 7000 range (ie expense) - I use 7001 for Directors, 7300 for staff
DR NIC Employers (p&l) 7016 (non Director) / 7012 (Director)
CR Net wages (B/S) 2220 ***
CR Tax / NIC Control total employers / employees NIC and tax. ---- PAYE 2210 / NIC 2211
When paying employee,
DR net wages   2220 ***
CR Bank.
When paying HMRC
DR Tax/NIC control
PAYE 2210 / NIC 2211
CR Bank.

-- Edited by abacus12345 on Tuesday 22nd of March 2016 07:08:36 PM

Hi

*** When you have paid the wages this account should always return to nil - a good sense check to see if you are doing it correctly.

You can lump the wages in one expenses code if you like - say 7000, or split them as I have suggested above.

You can also lump the PAYE (Tax and NI ) to one liability code as that means its easier when you come to allocate the Bank payment, but then its not all about making life easy and more to do with what your client might want to analyse.

If you cant get your head round it easily write down what you want to do - using the above as a template if you wish and make sure it all balances before you start. Then take a backup, check the backup works and then try keying it. Then if it doesnt work/balance you can do a restore and pose a Q again on here.

AnitaP · Veteran Member

Hi all.

Thank you very much for your help and replying back to me.

Cash Invoices : I have entered this on as a supplier called CASH Invoices and has been coded to 5000 as the client prefers this method of providing his paperwork and does not wish to seperate it all to every other expense codes.

Cash Bank Account: I have already sent one up as this shows all the sales transactions that come through on the tills for the business since the business as operated and all correct. In regards to cash levels. the client takes this money from the banking money from the tills than they deposit remaining into the business bank account. We are not conducting a bank reconcilation at the moment until its clear and up to date as their are other transactions coming in and out that do not relate to the business and the client wants it this way.

Wages : I will be using one nominal code from the 7000 range for wages as they are staff wages, a net figure and no NIC involved at all. What is the journal entry for the below, please?

For example:

2 Sundays cover paid £50 from their bank account as transfer to their account.
Wages Week 38 paid £161.40 from their bank account as transfer to their account.

For the NIC/PAYE payment that was been made by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, is this by Journal Entry tab?

Thanks,

AnitaP

Cheshire · Master Book-keeper

AnitaP wrote:
Hi all.

Thank you very much for your help and replying back to me.

Cash Invoices : I have entered this on as a supplier called CASH Invoices and has been coded to 5000 as the client prefers this method of providing his paperwork and does not wish to seperate it all to every other expense codes. This will skew his Gross and net profit figures. Should you not be trying to persuade him of the need to do correct accounting?

Cash Bank Account: I have already sent one up as this shows all the sales transactions that come through on the tills for the business since the business as operated and all correct. In regards to cash levels. the client takes this money from the banking money from the tills than they deposit remaining into the business bank account. We are not conducting a bank reconcilation at the moment until its clear and up to date as their are other transactions coming in and out that do not relate to the business and the client wants it this way. Ohhhhhh - LOTS OF ALARM BELLS RINGING HERE ANITA - sounds like their could be some money laundering going on Think you need to be having a very firm conversation with your client.

Wages : I will be using one nominal code from the 7000 range for wages as they are staff wages, a net figure and no NIC involved at all. What is the journal entry for the below, please? Given you DO have some NI even if its only for the boss, then its the same journals as already given.

For example:

2 Sundays cover paid £50 from their bank account as transfer to their account.
Wages Week 38 paid £161.40 from their bank account as transfer to their account.

For the NIC/PAYE payment that was been made by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, is this by Journal Entry tab? Set up the journals for what is DUE to be paid, ie the top third of the list already quoted. Dont use journals for making the payments - ie the bottom two thirds of the list quoted (for paying staff/paying HMRC)

Thanks,

AnitaP

Edited to re-highlight my answers which had turned back to black!

-- Edited by Cheshire on Sunday 27th of March 2016 03:42:30 PM

Cheshire · Master Book-keeper

AnitaP wrote:

How does the above be entered onto sage instant accounts, is this by Journal Entry tab? Dont enter items through Bank as journals in sage, unless your have the update to date version, otherwise when you do come to do the Bank rec, it wont work

Thanks,

AnitaP

Cheshire · Master Book-keeper

AnitaP wrote:

For example:

2 Sundays cover paid £50 from their bank account as transfer to their account.
Wages Week 38 paid £161.40 from their bank account as transfer to their account.

For the NIC/PAYE payment that was been made by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

By the way - for somebody earning net £161.40 there would normally be NI to Pay, so you need the payroll software info to get theses AND the bosses journals right.

- the Bank payment to HMRC would need to have had the liability keyed to the appropriate balance sheet accounts and then these Bank payments will reduce those balance sheets accounts so you shouldve already journalled in the wages information that the liabilities relate to.

CARE - if you are running payroll then ALL staff wages MUST be run through it, even the Sunday cover staff.

Leger · Master Book-keeper

AnitaP wrote:
Cash Invoices : I have entered this on as a supplier called CASH Invoices and has been coded to 5000 as the client prefers this method of providing his paperwork and does not wish to seperate it all to every other expense codes.
I know Joanne has already picked up on this, but are all the cash invoices from suppliers for stock or goods to resell? It would make sense to code to the correct nominal if there are other purchases eg stationary for the business. The problem here is that 5000 is a cost of goods sold and stationary is an expense, so they will be recorded incorrectly.
Even if yes I would follow Joanne's advice and set the suppliers up as normal then record the payments to the cash account. It makes far more sense.

Cash Bank Account: I have already sent one up as this shows all the sales transactions that come through on the tills for the business since the business as operated and all correct. In regards to cash levels. the client takes this money from the banking money from the tills than they deposit remaining into the business bank account. We are not conducting a bank reconcilation at the moment until its clear and up to date as their are other transactions coming in and out that do not relate to the business and the client wants it this way.
Two things. Is the money that the client doesn't bank accurately recorded? In other words are all takings from the tills recorded as sales or just the amounts that are to be banked? What things are going through the company bank account that do not relate to the business? This shouldn't be happening and you may need to consider your MLA responsibilities

Wages : I will be using one nominal code from the 7000 range for wages as they are staff wages, a net figure and no NIC involved at all. What is the journal entry for the below, please?

For example:

2 Sundays cover paid £50 from their bank account as transfer to their account.
Wages Week 38 paid £161.40 from their bank account as transfer to their account.

Is that £161.40 one employee, if so there is an NIC charge that should have been deducted? I'm assuming a PAYE scheme is in place for all employees, as you've indicated the owner has a salary that incurs PAYE/NIC charges.

For the NIC/PAYE payment that was been made by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, is this by Journal Entry tab?

See post 2 by Johnny (abacus12345) and post 6 by Joanne (Cheshire)

AnitaP · Veteran Member

Hi all.

Thank you for replying back to me.

Cash Invoices: I will speak to my client on this matter as it does make sense to code it all to individual expense codes then allocate/record it the CASH account.

Cash Bank Account: All the money is recorded correctly and all sales are recorded accurately. The client is changing accounts so that the business account purely reflects on the business.

Wages: Sorry to ask again on this matter but, where do i go into sage instant accounts to do the below enteries. For example, what do i select on sage?

I will be using one nominal code from the 7000 range for wages as they are staff wages, a net figure and no NIC involved at all. What is the journal entry for the below, please?

For example:

2 Sundays cover a aet fee of £50 was paid from their bank account as transfer to the other person's bank account.
Wages Week 38 paid £161.40 from their bank account was paid to the other person's bank account.

For the NIC/PAYE payment that was paid by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, again where do i go into sage to do this transaction?

The owner does have a payroll software but is not sage.

thanks

Cheshire · Master Book-keeper

Hi Anita
For the week 38 wages, as both John and I have explained there will be some NI. So to aid matters - please get full detail of the wages/NI and PAYE due for that period (including the bosses).

Also - please get the Wages and NI/PAYE information for the period represented by the payment to HMRC of £434.05 then I can once again do you a list of what needs to be keyed, which will include the entries for the payroll itself so you can see where the payment of the liabilities then resolves matters.

Can you also perhaps provide some background about your knowledge? Have you done much in terms of double entry work - this will help providing an explanation.

PS - doesnt matter that the payroll software isnt sage - you need the reports from it to be able to do the revelant/required journal entries.

Once you have this I can explain in sage where you look. Please advise version you are using (year)

Leger · Master Book-keeper

AnitaP wrote:
For the NIC/PAYE payment that was paid by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, again where do i go into sage to do this transaction?

Joanne is the sage guru, and she is best to advise you where to look depending on the version.

Is the above monthly pay or weekly pay? If monthly you will do a separate journal from the weekly ones. For the pay period this relates to you will need

Directors Pay DR 7xxx

Any Employers NI DR 7006

Directors Tax CR 2210

Directors NI CR 2211

Net Wages CR 2220

Thats the journal complete and you should do one for each month.

If the Director is weekly paid you only need do one journal covering both him and the members of staff, and the layout is exactly the same.

When the Director (or employee) is paid you do a bank payment coded to 2220.

When PAYE/NI is paid you do a bank payment coded to 2210 and 2211

Regarding the payment of £161.40, if this is a single employee there has to be a NIC deduction. Who is doing the wages, and what software is being used? I'm very surprised the software hasn't picked this up.

Cheshire · Master Book-keeper

Leger wrote:
AnitaP wrote:
For the NIC/PAYE payment that was paid by the bank account, this is only refers to the owner of the business.

For example: they have made a lump sum payment of £434.05 by bacs transfer to HMRC PAYE/NIC. Please see breakdown for the lump sum figure.
PAYE NET : £363.80
NIC NET : £70.25

How does the above be entered onto sage instant accounts, again where do i go into sage to do this transaction?
Joanne is the sage guru, and she is best to advise you where to look depending on the version.
Is the above monthly pay or weekly pay? If monthly you will do a separate journal from the weekly ones. For the pay period this relates to you will need
Directors Pay DR 7xxx
Any Employers NI DR 7006
Directors Tax CR 2210
Directors NI CR 2211
Net Wages CR 2220
Thats the journal complete and you should do one for each month.
If the Director is weekly paid you only need do one journal covering both him and the members of staff, and the layout is exactly the same.
When the Director (or employee) is paid you do a bank payment coded to 2220.
When PAYE/NI is paid you do a bank payment coded to 2210 and 2211

Regarding the payment of £161.40, if this is a single employee there has to be a NIC deduction. Who is doing the wages, and what software is being used? I'm very surprised the software hasn't picked this up.

Which....like you said earlier John is all already quoted See post 2 by Johnny (abacus12345) and post 6 by Joanne (Cheshire)

I do remember the first time I had to do the wages journals that I couldnt get my head round it until I had it written down - so I set up the info on a card with each part of the process and which is a debit and which is a credit. I used the card for a few months until I got my head round it. So I thought it might help Anita to see the actual information with the amounts, because at the moment it seems she is just looking at part of the equation (eg the payment of HMRC, without having set up the original liability entries).

Does sound as though her client is quite happy to keep Anita in the dark with certain information, just insure if its deliberate or just through not having a clue what Anita needs to do her job properly, but hopefully she will get what she needs and soon.

-- Edited by Cheshire on Monday 28th of March 2016 02:56:44 PM

Cheshire · Master Book-keeper

no idea why my post was listed twice!! But now edited to get rid of the repeated second response

-- Edited by Cheshire on Monday 28th of March 2016 02:58:07 PM

abacus12345 · Guru

With PAYE, doesn't the previous advisor not have to deactivate their credentials as such, so as that the next advisor can process? It is probably not of concern here. Just a thought

Cheshire · Master Book-keeper

abacus12345 wrote:
With PAYE, doesn't the previous advisor not have to deactivate their credentials as such, so as that the next advisor can process? It is probably not of concern here. Just a thought

Do you mean as agent? Or in the payroll software?

(Wont affect Anita as she is just getting the information provided to her)

abacus12345 · Guru

As an agent Joanne. Thanks

Cheshire · Master Book-keeper

abacus12345 wrote:
As an agent Joanne. Thanks

(Sort of) depends what software you are using. Im not listed at HMRC agent for a couple of my clients (just cos they kept losing the paperwork or the activation codes) but I manage to do the payroll including RTI reporting via Moneysoft. The only thing it should stop me from doing is ringing up and asking loads of questions. Although saying that - I rang HMRC the other day about a client and because I could identify myself via the myriad of client based Q&As (pretty basic ones) HMRC answered all my questions, this despite the fact they have the Accountants down as payroll agents!

abacus12345 · Guru

Ok thanks for that, that's interesting. So in essence, it is a similar set up to 3rd party tax return software, whereby you can get through it with the UTR number, as an oppose to using hmrc software, and needing to be an agent, or, purporting to be the client themselves.

Cheshire · Master Book-keeper

Oh and I forgot to add - HMRC can only have one listed agent per 'product' - stupid system and drives me nuts (**)but if for example you take on a customer who has an agent for payroll, then you complete the agent form to take over, HMRC will actually delete the old agent off their system on receipt of the new agent form.

I would remove myself as agent though in the event of a dispute, or if you knew your client was taking the role on themselves - Ive had calls from HMRC chasing the debt when Ive dumped clients and they havent had anyone take over as agent.

**This causes problems when as in my case Accountant is listed as Agent for Corporation Tax, but I am the one who deals with all the foreign tax eg getting certificates of residence as the latter are obtained via the CT department of HMRC, who then refuse to speak to me as Im not listed as agent. They suggest every time I get agent authorisation, yet that would mean the Accountants cant deal with them as it would kick them off the system. The only option is then to get my clients authority to speak to me, which I do EVERY time, yet they ignore it and we all go round in circles for a few weeks. Numpty system!

Cheshire · Master Book-keeper

abacus12345 wrote:
Ok thanks for that, that's interesting. So in essence, it is a similar set up to 3rd party tax return software, whereby you can get through it with the UTR number, as an oppose to using hmrc software, and needing to be an agent, or, purporting to be the client themselves.

Yep, UTR or payroll refs. (Sorry was typing another message to you!)

abacus12345 · Guru

That's information worth knowing. At the moment it is only really SA I have dealings with. PAYE, dare I say it, I understand the subject, yet don't have the need to use any of the systems. It is good to know the logistics of how the process works though. I wonder if any of the new regimes forth coming will help, or hinder us in our endeavours, I know what my money is on!

Leger · Master Book-keeper

Cheshire wrote:
I do remember the first time I had to do the wages journals that I couldnt get my head round it until I had it written down - so I set up the info on a card with each part of the process and which is a debit and which is a credit. I used the card for a few months until I got my head round it. So I thought it might help Anita to see the actual information with the amounts, because at the moment it seems she is just looking at part of the equation (eg the payment of HMRC, without having set up the original liability entries).

Hi Joanne

This is where VT possibly makes you lazy, because once you've set the first journal up, subsequent journals already have the entries, if the same name is used. I go Salaries, then just add week or month 1 etc.

I knew the formula off by heart as I used to send my sage client that weeks breakdown so she could do the journal.

Cheshire · Master Book-keeper

Hi John
Ive only used VT a little, but I can see what you mean. In that respect its way more intuitive than Sage. Hoping to find the time to have another try to see what else it can do!

If you set up the information properly in the payroll software you can get reports showing the nominals and therefore the transactions to each - well you can in Moneysoft (Ive never got round to it, but keep saying I will!) and 12 Pay (used this but payroll was for a company with quite a few and ever changing staff so it made it easier so worth putting the effort in initially!)

AnitaP · Veteran Member

Hi Joanne,

Please see my replies to your questions in the brackets in red font.

Hi Anita
For the week 38 wages, as both John and I have explained there will be some NI. So to aid matters - please get full detail of the wages/NI and PAYE due for that period (including the bosses). ( The sunday cover payment of £50 - this is a one-off casual staff and no NI, it just straight payment. For the Wages week 38 for £161.40, weeks 40/41 for £354.80 and week 46 for £177.40 : for these amounts, I will ask the client for more details whether there is NI and PAYE or, is this a casual staff that has no NI, PAYE and the staff are paying themselves on it?)

Also - please get the Wages and NI/PAYE information for the period represented by the payment to HMRC of £434.05 then I can once again do you a list of what needs to be keyed, which will include the entries for the payroll itself so you can see where the payment of the liabilities then resolves matters. ( From the summary sheet, this refers to the owner of the business - HMRC PAYE/NIC : payment made for £434.05 is month 8, PAYE NET TAX is £363.80 and Gross NI £70.25. Payment made for £327.60 is month 9, PAYE/NET TAX is £271.40 and Gross NI is £56.20. The owner has paid Self-employed Class 2 NIC for the period 03/2015 to 04/2015 of £13.75 : please advise on how this to be coded onto sage and by which tab/icon? )

Can you also perhaps provide some background about your knowledge? Have you done much in terms of double entry work - this will help providing an explanation. (I have knowledge on management accounts and reconcilation work, double entry manually is something that I need to write down and do to get more knowledge as previously. I had a team whom worked with me)

PS - doesnt matter that the payroll software isnt sage - you need the reports from it to be able to do the revelant/required journal entries.

Once you have this I can explain in sage where you look. Please advise version you are using (year) ( The Sage instant accounts 2012, version 21)

Cheshire · Master Book-keeper

AnitaP wrote:
Hi Joanne,

Please see my replies to your questions in the brackets in red font. Oh the red has failed - sometimes does that to me, either when there are lots of colours in use or more so, if you hit delete to sort out a typo!!!!
I will take this in two parts, for ease when you come to read it!
Hi Anita
For the week 38 wages, as both John and I have explained there will be some NI. So to aid matters - please get full detail of the wages/NI and PAYE due for that period (including the bosses). ( The sunday cover payment of £50 - this is a one-off casual staff and no NI, it just straight payment. For the Wages week 38 for £161.40, weeks 40/41 for £354.80 and week 46 for £177.40 : for these amounts, I will ask the client for more details whether there is NI and PAYE or, is this a casual staff that has no NI, PAYE and the staff are paying themselves on it?) Can I just clarify - from a HMRC point of view there is no such thing as 'casual staff'. Your client has them working for him - he decides the hours/ where they work/ how/what they do and if he runs the PAYE scheme then he MUST run ALL other staff through it. There are very few exceptions to this and being above the threshold for NI means he will HAVE TO or risk fines and the rest! To stress - they cannot pay their own tax/NI as they are NOT self employed (they cannot be s/e!)

Also - please get the Wages and NI/PAYE information for the period represented by the payment to HMRC of £434.05 then I can once again do you a list of what needs to be keyed, which will include the entries for the payroll itself so you can see where the payment of the liabilities then resolves matters. ( From the summary sheet, this refers to the owner of the business - HMRC PAYE/NIC : payment made for £434.05 is month 8, PAYE NET TAX is £363.80 and Gross NI £70.25. Payment made for £327.60 is month 9, PAYE/NET TAX is £271.40 and Gross NI is £56.20. The owner has paid Self-employed Class 2 NIC for the period 03/2015 to 04/2015 of £13.75 : please advise on how this to be coded onto sage and by which tab/icon? ) Separating out for ease

Can you also perhaps provide some background about your knowledge? Have you done much in terms of double entry work - this will help providing an explanation. (I have knowledge on management accounts and reconcilation work, double entry manually is something that I need to write down and do to get more knowledge as previously. I had a team whom worked with me) Double entry is a must in this job - crack that and a chunk of the rest is easy. If writing it down helps, then absolutely write it down. You would be surprised at the number of people who will have done in the early days and maybe do with the odd thing years in. There is loads on here even with acroyms to help you. I think you might also consider doing a course - perhaps look at the Level 2 AAT as double entry is taught there and will provide more confidence in this area.

PS - doesnt matter that the payroll software isnt sage - you need the reports from it to be able to do the revelant/required journal entries.

Once you have this I can explain in sage where you look. Please advise version you are using (year) ( The Sage instant accounts 2012, version 21) Separated out

__________________

-- Edited by Cheshire on Tuesday 29th of March 2016 06:46:22 PM

Cheshire · Master Book-keeper

AnitaP wrote:

Also - please get the Wages and NI/PAYE information for the period represented by the payment to HMRC of £434.05 then I can once again do you a list of what needs to be keyed, which will include the entries for the payroll itself so you can see where the payment of the liabilities then resolves matters. ( From the summary sheet, this refers to the owner of the business - HMRC PAYE/NIC : payment made for £434.05 is month 8, PAYE NET TAX is £363.80 and Gross NI £70.25. Payment made for £327.60 is month 9, PAYE/NET TAX is £271.40 and Gross NI is £56.20. The owner has paid Self-employed Class 2 NIC for the period 03/2015 to 04/2015 of £13.75 : please advise on how this to be coded onto sage and by which tab/icon? )

Once you have this I can explain in sage where you look. Please advise version you are using (year) ( The Sage instant accounts 2012, version 21)

__________________

Part two.

Just noticed that you have only given me the PAYE tax and Ni and not the gross wages. I could work this out but Im not sure what the split is between employERS and employEEs NI is, assuming there is some of the former or he is claiming the NI allowance. But to be honest I dont want to work it out (sorry not being mean, Im mega busy but more so need you to be able to get to the information you need comfortably). So - can you provide the summary sheet (NB Take out ALL identifying features before you copy it to here)

Then I will do a detailed response

Cheshire · Master Book-keeper

Re the clear lack of proper payroll.

HMRC state:- Youre exempt from PAYE if none of your employees is paid £112 or more a week, gets expenses and benefits, has another job or gets a pension.

Note the word NONE. He cannot claim exemption from this as he is paying himself over the £112, as well as other staff. Also note - if the staff and him were being paid £111.99 or less then only ONE member of staff has or gets another job, get expenses or benefits or a pension the he HAS to run a PAYE scheme and report all wages before they are paid, under RTI.

Failing to do so is tax evasion and you have a duty to report.

abacus12345 · Guru

Would it not be safer to run PAYE anyway? Can people be trusted to be open about having a second job? I'm surprised HMRC haven't made it mandatory to report all figures, whether over 112, or 10 per week. With businesses such as shops / hair dressers, beauty parlour etc, being high risk as such, I think HMRC are missing a trick. Not forgetting sone paying below minimum wage - that's another story.

Cheshire · Master Book-keeper

Oh yes much safer! The problem with that daft system is that people might not have a second job or whatever when they start, but then they get one and forget to tell the business owner, but its the business owner who can get into trouble....for not checking up with his staff. Oh and that person might only earn 10p (well you know what I mean) at the other job, but the business owner has all the hassle of having to set up a scheme, input all the details to date and start doing RTI, all probably at the last minute as these things always happen last minute. So yep - might as well do it all from the start!

This one certainly sounds like Anita might need to have some challenging conversations with the owner!

abacus12345 · Guru

In my opinion, it's a major issue. Even more so if employees are only working Saturday and Sundays. Where are they the rest of the week? If I were an employer, they'd be on payroll for sure. As you say, from 10p upwards!

Leger · Master Book-keeper

AnitaP wrote:
- HMRC PAYE/NIC : payment made for £434.05 is month 8, PAYE NET TAX is £363.80 and Gross NI £70.25. Payment made for £327.60 is month 9, PAYE/NET TAX is £271.40 and Gross NI is £56.20. The owner has paid Self-employed Class 2 NIC for the period 03/2015 to 04/2015 of £13.75 : please advise on how this to be coded onto sage and by which tab/icon? )

Hi Anita

Is this a Ltd Company or a Sole Trader? If Ltd Co why is the Director paying Class 2 NI? Just for reference Class 2 NI is a personal expense and not a business one, so if Ltd Co post it to the DLA (2301? or sole trader post it to drawings.

If he's a sole trader why the hell is he on salary?

Anita, I say this with the utmost respect but it sounds like the whole situation is a nightmare, and that the accounts and payroll are in a right mess. Unless you are 100% confident in what you're doing I would walk away from it.

Johnny and Joanne (hey we're the 3 J's lol) got to agree with you on having the paye scheme in place even if all employees are under LEL.

Amended to highlight class 2

-- Edited by Leger on Wednesday 30th of March 2016 11:56:50 AM

AnitaP · Veteran Member

Thank you all for your help and I will look into this further

Shamus · Forum Moderator & Expert

Hi John,

I think that this is one of those threads where people may be interpreting some answers given as original facts.

Trying here to be completely fair I don't think that Anita ever said herself that it was a limited company which would explain the class 2. Also I believe that from reading through Anita's posts the payroll is for employee's rather than his/her own drawings.

One very minor addendum to your post, for anyone else reading this not familiar with limited companies, employers Class 1 would of course be a company expense where employee's Class 1 belongs to the director.

Sorry, only a small change but I thought for completeness I needed to add it in case anyone misinterpreted what you meant by the NI belonging in the DLA.

My appologies, I've not been following this thread as I noticed in the opening question it mentioned Sage and as a rule I just let those one's go. However, the amount of interest in this thread has drawn my attention and I realise that it has expanded well beyond something software specific.

kindest regards,

Shaun.

Shamus · Forum Moderator & Expert

Hi Anita,

not sure but I do not think that we have spoken before so welcome to the forum.

as mentioned above I almost missed this thread due to it appearing to be software specific.

It sounds as though you are realising the quantum leap between analysing other peoples data entry and being faced with the data entry yourself.

I think that it was unfortunate that there was an assumption early in this thread that you were talking about the director of a limited company as that has skewed some of the later responses.

Taking the wages part out of the equation for now you would be very wise to read

I think that you can learn a lot from Joanes posts of 15:32 and 18:21 which cover some very important ground. Also John's post of 22:25

This profession requires that the data that you keep be as detailed as possible. We may summarise and group it for clients but we need to be able to drill down (which I'm sure that you realise from your previous position) and there were a couple of statements that you made that worried me that you were being driven by the clients requirements rather than what you need to do.

If you are having problems with double entry could I suggestdoing the BPP AAT workbook for units 1 to 4 (you should be able to complete it cover to cover without error in a weekend. If you cannot then it will show you areas that you need to work on).

If you are having quite fundamental issues with the workbook try Business Accounts by David Cox which really helps a lot of people get to grips with bookkeeping. It's quite a basic book but one that I still find myself referring to on occassion.

From the issues that you are having it would be remis if me not to also say that you need to have good PII in place for your business. I am sure that you already have but just on the off chance that you don't.

kindest regards,

Shaun.

Cheshire · Master Book-keeper

Anita
Can you clear up the - is it a limited company or sole trader query please before anybody goes any further with this one.

Thanks

Leger · Master Book-keeper

Shamus wrote:
Hi John,

Trying here to be completely fair I don't think that Anita ever said herself that it was a limited company which would explain the class 2. Also I believe that from reading through Anita's posts the payroll is for employee's rather than his/her own drawings.
Anita has stated there are is no employee tax or NI and the payment to HMRC was what had been deducted for the owner. She didn't say it was a Ltd Co, but we drew that conclusion because a salary had been paid to him.

One very minor addendum to your post, for anyone else reading this not familiar with limited companies, employers Class 1 would of course be a company expense where employee's Class 1 belongs to the director.

Sorry, only a small change but I thought for completeness I needed to add it in case anyone misinterpreted what you meant by the NI belonging in the DLA.
I have amended my post Shaun, I had referred to class 2 in the second sentence and my third sentence is in relation to that, but I can see that it wasn't clear. It was only when Anita mentioned class 2 that I thought WTH, why is a sole trader down as PAYE?

Joanne is right, we need to know whether this is a Ltd Co or a sole trader before going any further.

-- Edited by Leger on Wednesday 30th of March 2016 12:13:28 PM

Cheshire · Master Book-keeper

Any news Anita?

AnitaP · Veteran Member

Hi Shaun,

Thank you for welcoming me to the forum. We have never spoken before and, this is the first time.

In regards to the double entry, I have bought the Osborne AAT workbook for units 1 to 4, which has really helped to understand with bookkeeping and the sage books, have been good as they outline the payroll codes and how to set them out too. Even though, am grateful for everyones help on it. As, its alot different from my background of management accounts and reconciliation work. Also, I do have PII in place for my business, thank you for your advice on that matter.

There has seem to be a lot of interest in my post which is all good but, I need to clarify a few little matters before it goes beyond discussion. Also, you are right that I have never mentioned whether my client is a LTD or Sole trader, and the wages whether they are employers/ees.

My client is a sole trader.
The client pays Self-Employed Class 2 NICs

Wages

HMRC PAYE/NIC payment made of £434.05 is for EMPLOYEES ( PAYE month 08 )

PAYE NET is £363.30

NI NET is £70.25

HMRC PAYE/NIC payment made of £327.60 is for EMPLOYEES ( PAYE month 09 )

PAYE NET is £271.40

NI NET is £56.20

Wages Week 38 paid £161.40 to the employee by BACS transfer.

The above figure of £161.40 is the NET paid to the employee. Yes, there is NI involved hence this amount paid to the employee, I am awaiting for the GROSS and NI amount to make the NET balance, before anything is entered on to the accounting system.

I hope the above information, makes sense to all people reading this topic.

Thanks.

Cheshire · Master Book-keeper

Hi Anita
That helps. We are almost good to go on the wages journals and entries as well as how to do them, once you have the reports. Speak to you again then.