Payroll with quickbooks.

[mrjonathanbrown]

Hi,

I would like to start using payroll with quickbooks. I incorporated my business in August 16. So effectively I been working since August. However through quickbooks I have been logging payments to myself as 'cost of labour' as an expense when synced to my bank account.

So I'd just like to know if it's best that I set up payroll now and have the start date some point this month or am I able to use the begining of August 2016 and re-categorise my previous payments with payroll.

Many thanks.

 

[Scalloway]

I take it you are operating through a limited company. I would class the payments to yourself as a director's loan and clear it with a salary payment. As a director your NI is calculated on an annual basis so you will not lose out on NI deductions.

 

[mrjonathanbrown]

Scalloway can I ask why you would class my payments to myself as a directors loan and clear with salary payment? -

I'm looking at getting a mortgage in the next couple of years so I want to make sure everything is in order in terms of how I pay myself.

If I set up payroll can I have previous payments I made to myself be logged into payroll?
Instead of cost of labour.

 

[Scalloway]

Because nowadays all payroll payments have to be reported to HMRC online at the time of payment through RTI.

You do not say how much you took from your company. You also do not say if you had income from PAYE, self employment or a pension during the period 5 April to August.

There is more information on reporting payroll to HMRC here.

https://www.gov.uk/guidance/what-payroll-information-to-report-to-hmrc

 

[Newchodge]

That is what is being suggested. Set up with Hmrc as an employer. Set yourself up as an employee on Quickbooks payroll (and I hope for your sake it is not the PC based version). Transfer by journal entry the cost of labour to debit the directors loan account (which is where it should have been all along). Run your first payroll for the full amount debited to the DLA and use it to credit the DLA and there you have it you have received through payroll all the money that you paid yourself in the wrong way in the first place.

I take it you understand your payroll reporting obligations?