Late NI Payments

[jones87]

Hello,

A company has 2 director's earning £6,500/annum on PAYE, paid monthly since May 2009

The company is registered with the PAYE/NI office, however no submissions or decelerations etc have ever been submitted. Both employee's are on the system on HMRC online.

The NI/Tax comes to around £91 per employee for the year, should the company expect fines?

Also, is £6,500 really necessary? as part of a salary/dividend combination, I heard that a lower amount can be used which still earns your stamp but without paying any NI?

Thanks for your help..

[taxattack]

Hello,

A company has 2 director's earning £6,500/annum on PAYE, paid monthly since May 2009

The company is registered with the PAYE/NI office, however no submissions or decelerations etc have ever been submitted. Both employee's are on the system on HMRC online.

The NI/Tax comes to around £91 per employee for the year, should the company expect fines? In year fines dont come in until 2010-11. http://www.hmrc.gov.uk/paye/factsheets/fpl_1.pdf

Also, is £6,500 really necessary? as part of a salary/dividend combination, I heard that a lower amount can be used which still earns your stamp but without paying any NI? The upper threshold is £110 per week.

Thanks for your help..

Be sure to submit the year end P35 in time.

Chris

[Tom McClelland]

As they are directors their NI contributions can be calculated on a cumulative annual basis, so NI liability would only start to accrue once their pay to date has exceeded the annual earnings threshold.

So with any luck there isn't any NI due yet. The first NI liability will probably come up in Feb or March.

If they became directors since 6th April 09 they don't get a full year's NI earnings threshold, they get a pro-rata of that threshold based on the proportion of the tax year during which they've been directors. But if they've been paid since May it sounds as if they'll get 11/12 of the annual allowance.

Good accredited payroll software will allow you to do the calculations :cool:, just enter the directorship appointment date and run through the months from May to the end of the year with each month's payments.