If I no longer take salary from my own ltd company, should I have a P45?

[Wowee]

Been employed by my own ltd company for some years now, but currently struggling for revenue. The company has no other employees, my partner and I are the only shareholders and directors.

So last Monday I started looking for a part-time job, and by Friday I had been offered a position, I start next week.

My Ltd company will continue to trade, but it isn't my intention to take any salary from it. I may need some expenses, and would plan to take small dividends once or twice a year.

So, am I right to issue a P45 and take that to my new employer next week? Or should I have a P46? If a P46, how do I get all my tax allowance allocated to my new job?

Thanks in advance.

 

[FluentFinances]

Hi
Yes issue a P45 to give to your new employer.
You can still take drawings and claim expenses as a director of your company

 

[Tom McClelland]

Hmm, I'm not sure if you're technically allowed to leave the employment of a company that you're a director of. (It may sound counter-intuitive, as you're not compelled to join that employment by virtue of being a director). I'm fairly sure that variants of this question have arisen at a couple of client companies and they were told by HMRC that they shouldn't leave in PAYE terms without resigning the directorship too (which might be impractical of course)

So probably you should join the new company on a P46 with Box C ticked to start with, but...

To get the whole of your tax allowance allocated to your new job without resigning tell the tax office about the 2 jobs, and that you'd like your allowance allocated to the new company, and they will issue a pair of P6s to your existing company and to your new employer.

 

[Wowee]

Hmmm, and I wonder how long it will take HMRC to issue the P6s?

Really I didn't want my 1st months salary having a huge chunk of tax taken off while the whole thing was sorted.

 

[EstherG]

Couldn't you tick Box B on the P46 (This is your only job, but since last 6 April you have had another job...) that way you'll get put on a week 1 or month 1 tax code and so receive the tax free allowance for your first pay while you contact HMRC?

 

[ustina]

Am Director for my company and only the one employee, if i not willing to have any income ,just dividend, shell i enroll for RTI ?

 

[Tom McClelland]

Am Director for my company and only the one employee, if i not willing to have any income ,just dividend, shell i enroll for RTI ?

Dividends are not reportable via RTI, so if you intend to pay entirely through dividends then no PAYE scheme is required. Shut it down to avoid all RTI concerns or you'll be expected to file RTI nil returns.

 

[Wowee]

Hmm, I'm not sure if you're technically allowed to leave the employment of a company that you're a director of. (It may sound counter-intuitive, as you're not compelled to join that employment by virtue of being a director). I'm fairly sure that variants of this question have arisen at a couple of client companies and they were told by HMRC that they shouldn't leave in PAYE terms without resigning the directorship too (which might be impractical of course)

So probably you should join the new company on a P46 with Box C ticked to start with, but...

To get the whole of your tax allowance allocated to your new job without resigning tell the tax office about the 2 jobs, and that you'd like your allowance allocated to the new company, and they will issue a pair of P6s to your existing company and to your new employer.

Hi Tom, Realised that of course I want to un-register as an employer, as I won't be paying anyone and don't want the faff of having to send in nil returns every month under RTI. So rang Employer helpline to ask how I do it.

Apparently, I send in a P45 for every employee - that'll be me then .
I did question that, seeing as I'm a director. the advisor went off to check, yes I should issue a P45 for directors too.

 

[Tom McClelland]

Hi Tom, Realised that of course I want to un-register as an employer, as I won't be paying anyone and don't want the faff of having to send in nil returns every month under RTI. So rang Employer helpline to ask how I do it.

Apparently, I send in a P45 for every employee - that'll be me then .
I did question that, seeing as I'm a director. the advisor went off to check, yes I should issue a P45 for directors too.

Clearly if the scheme is shutting down then everyone gets a P45.

My earlier advice related to the situation of a director (apparently) leaving employment while the scheme remains running. In which case a P45 should not be issued.

 

[David Griffiths]

Clearly if the scheme is shutting down then everyone gets a P45.

My earlier advice related to the situation of a director (apparently) leaving employment while the scheme remains running. In which case a P45 should not be issued.

We've had a few instances in the past where a director has stopped trading via his own company and taken up separate employment. In such cases we've always issued a P45 to give to the new employer, and there have never been any practical issues with this.

The scheme is usually kept live, if the director wants to keep the company going, and when he starts to use the company again we use the P45 brought over from the employment.

As I said, never been any issues with this.

 

[Tom McClelland]

We've had a few instances in the past where a director has stopped trading via his own company and taken up separate employment. In such cases we've always issued a P45 to give to the new employer, and there have never been any practical issues with this.

The scheme is usually kept live, if the director wants to keep the company going, and when he starts to use the company again we use the P45 brought over from the employment.

As I said, never been any issues with this.

In practical terms probably no-one ever notices or cares if you just go ahead and do it.

But we've been told by tax offices that you can't issue P45s to directors unless they resign their directorship as well as their employment. (Of course that advice could be wrong, but it has been consistent)

In particular it creates NI problems if the director were to rejoin within the same PAYE year. That's how we found out that they shouldn't "leave" in the first place. We rang the TO to find out how we should handle the return to the original directorship/employment.