First time using RTI query

[yourcreditmanager]

Hi Guys

Sorry if this topic has been covered elsewhere but here goes…

Just getting my head round HMRC's RTI service to pay myself my first salary payment for the new tax year… it's a bit migraine inducing…!

I've downloaded the RTI software, updated my limited company details with my paye reference and sole employee details, myself, and about to file my first submission for my first monthly salary payment for £786.67 (£9440 to paid by salary in the 2013/14 tax year). This level of payment incurs ni contributions for both employer and employee. I understand that the employer NI contribution needs to be paid the month following payment to the employee of the salary payment but can the employee contribution be paid at a later date? I'd prefer to pay this element in one annual lump sum if this is possible - can this be done and if so at what stage and via what process (filing of self- assessment form for the director perhaps?) On a related note, am I right in thinking the payment of £786.67 to be paid to myself can be exactly that amount, i.e: not less the NI deductions for employer or employee, so I (as the employee) receive exactly £786.67 each month? [/font]

In previous tax years I always used to pay myself a salary below the threshold where NI was incurred so there was all less of an issue - apologies if it appears I'm a tad lazy but there's a tremendous amount of material on the internet covering this and I'm a bit pressed for time to sift through it all myself independently so I'd thought I'd ask here…

Cheers


Michael

 

[Tom McClelland]

Employee NI must be deducted from pay as it is incurred, and the sum of employee + employer NI should be paid to HMRC on a monthly/quarterly basis, as arranged.

 

[RTI-man]

As Tom has said the NI has to be deducted at source and therefore instead of receiving £786.67 per month, you'll get £769.79 (£786.67 - £16.88).

As you are a Director then you could opt to pay via Directors Annual which means you'll not pay NI until you've cumulatively exceeded the Annual Primary Threshold (£7755.00).

This would mean that in months 1 - 9 you wouldnt pay any NI for either E'ee or E'er but then pay:
Month
10: £13.40 E'ee, £23.55 E'er
11 & 12: £94.40 E'ee, £108.56 E'er each month

If however you were keen to only pay NI in the last month then you could pay yourself £641.04 per month for months 1 to 11 and then £2388.56 in month 12.

Either option results in the same amount of NI being paid at the end of the year (£202.20 E'ee and £240.67 E'er).

 

[yourcreditmanager]

Tom/RTI Man

Gents, thank you - it's because of guys like you that this forum works and is worthwhile. Exactly what I needed to know.

Michael