PAYE & Director's Salary

Discussion in 'Accounts & Finance' started by Era, Jul 23, 2021.

  1. Era

    Era UKBF Newcomer

    19 2
    Good afternoon everyone,

    I am in a little bit of struggle. I have set up my brand in 2019, and I have been the only employer so far. Few days ago I decided to hire my first two employees, and before doing that I registered for PAYE as an Employer.
    The problem is, in January 2021 I paid to myself £6950 as Director Salary - I simply paid the money from the business account to my personal ( please understand I did not have a true understanding of payroll)
    Now I find myself in trouble, as I would like to inform HMRC that I paid myself that much, but I do not know how to do it, as when I try to file my payslip through my payroll software it says I will incur a fine for late submission.

    What should I do?
     
    Posted: Jul 23, 2021 By: Era Member since: Sep 21, 2018
    #1
  2. Dave Boatman

    Dave Boatman UKBF Newcomer

    22 2
    Depending upon when your year end was you may be able to treat the first payment as a director loan and now pay yourself the same amount which can then be used to repay the director loan. This doesn’t need any cash to move around it would be done through journal entries.
    Going forward get an accountant
     
    Posted: Jul 23, 2021 By: Dave Boatman Member since: Mar 27, 2020
    #2
  3. Era

    Era UKBF Newcomer

    19 2
    Thank you!
     
    Posted: Jul 23, 2021 By: Era Member since: Sep 21, 2018
    #3
  4. NicoJ

    NicoJ UKBF Enthusiast

    404 76
    If you had no other PAYE income in the year to 5 April then you wouldn't have needed a PAYE scheme so you don't need to do anything.

    Once a scheme has been set up you will need to report any payments to you going forward.
     
    Posted: Jul 24, 2021 By: NicoJ Member since: Mar 27, 2017
    #4
  5. STDFR33

    STDFR33 UKBF Legend

    4,711 1,269
    Unless they had a job in addition to their business.
     
    Posted: Jul 24, 2021 By: STDFR33 Member since: Aug 7, 2016
    #5
  6. NicoJ

    NicoJ UKBF Enthusiast

    404 76
    Covered in the first sentence of my post.
     
    Posted: Jul 24, 2021 By: NicoJ Member since: Mar 27, 2017
    #6
    • Thanks Thanks x 1
  7. STDFR33

    STDFR33 UKBF Legend

    4,711 1,269
    Sorry didn’t see that. Clearly too much wine last night!
     
    Posted: Jul 24, 2021 By: STDFR33 Member since: Aug 7, 2016
    #7
    • Thanks Thanks x 1
  8. DWS

    DWS UKBF Regular

    290 48
    I had always been under the impression that if an employee (including directors) were paid above the LEL then a payrol scheme needed to be set up and reported through RTI, is this incorrect?
     
    Posted: Jul 24, 2021 By: DWS Member since: Oct 26, 2018
    #8
  9. Scalloway

    Scalloway UKBF Legend

    17,414 3,759
    If the employee or director wants to be credited with NI contributions then their salary needs to be reported through RTI. I don't think it is compulsory though if they don't have any taxable employment income.
     
    Posted: Jul 24, 2021 By: Scalloway Member since: Jun 6, 2010
    #9
  10. DWS

    DWS UKBF Regular

    290 48
    Posted: Jul 24, 2021 By: DWS Member since: Oct 26, 2018
    #10
  11. Newchodge

    Newchodge Business Member

    16,186 4,571
    And all of them can tick box A on the new starter's list.
     
    Posted: Jul 24, 2021 By: Newchodge Member since: Nov 8, 2012
    #11
  12. oz07

    oz07 UKBF Newcomer

    43 9
    Do you have basic paye tools? I prefer it to any fancy software
     
    Posted: Jul 24, 2021 By: oz07 Member since: Oct 1, 2012
    #12
  13. DontAsk

    DontAsk UKBF Legend

    2,310 396
     
    Posted: Jul 24, 2021 By: DontAsk Member since: Jan 7, 2015
    #13