Urgent PAYE/Self-Assesment dilemna!

[NewDelhi]

Well, there's nothing like leaving it till the last minute, and with 3 days before the 08-09 online deadline, I've hit a major snag.

Basically, during the 08-09 tax year I was employed by a company on a salary of 433 per week. This agreement was backdated from 4 months into the tax year, and so I received an initial payment of 1733, followed by a standing order of wages, 433 per month, for the remaining 8 months of the year.

This all seemed to work perfectly, no tax was payable as I fell under the personal allowance limit. HOWEVER, it now appears that the PAYE documentation was not submitted for the entire year, and thus my PAYE status shows employment finishing after 4 months and only receiving 1733 for the entire tax year. Now I am trying to complete my tax return using the correct figuire of circa 5200, but this obviously does not match to the employment PAYE return.

I'm not quite sure where I lie with this, and don't seem to be having much joy with the accountants. There would be no tax payable on the salary as it falls below the annual personal allowance, however it has technically not been declared.

Is it too late to amend any PAYE details?

Any help would be kindly, kindly appreciated.

 

[Williams lester]

Not sure entirely what the problem is, if you are completing your personal self assessment then enter the figures of salary received and tax deducted.

What the company has filed is irrelevant to your own self assessment return.

 

[Tom McClelland]

Not sure entirely what the problem is, if you are completing your personal self assessment then enter the figures of salary received and tax deducted.

What the company has filed is irrelevant to your own self assessment return.

Indeed. What will happen is that you and/or the company will get a phone call or letter in a few months asking you to explain the discrepancy.

That doesn't stop you from filing your SA return now.

EDIT: If you're a director of the company, or close associate, then probably you should think more carefully about filing anything different from what the company has filed. What documentation do you have from the company? Payslips? P60? P45? If you're going to file PAYE income of £5200 then you need supporting documentation, preferably in the form of a P60.

 

[NewDelhi]

Thank you for the replies.

It is a small company and I am close associate. Therefore I assume I would be better off to agree with the official documentation and submit the amount on the P60.

However, were does that leave the wages that have not been accounted for with the PAYE?

Its basically been a big misunderstanding between the company, the accountant and myself, but I'm just not sure how to resolve it best.

 

[Williams lester]

If you are not a director or shareholder of the company, then I would recommend including it on your SA, what the company has filed is not your concern, you have received salary and should report it on the SA submission.

 

[elaine@cheapaccounting]

Thank you for the replies.

Its basically been a big misunderstanding between the company, the accountant and myself, but I'm just not sure how to resolve it best.

Best to talk to them about it then.

SA figures should be as per your provided P60

 

[NewDelhi]

Thanks very much for the replies on the forum, its really much appreciated.

The problem is that the company has gone dormant since my wages were ceased in July 08 (with the 1733 payment). This was contrary to my orders but I have only just discovered the problem.

Basically the wage should have carried on into 09 on the PAYE system, and I had setup a standing order transfer for the wages. However, the wages were paid on a monthly basis from the company but with no corresponding PAYE documentation.

Its far more above board and genuine than it obviously sounds, but its not got me in a real conundrum. I was originally, but am no longer a director of said company, so if I was to transfer the money back to their account (thus straightening out the book) then i'm really not sure how I could get it back again. Not that there is any dispute, but simply that the company is now dormant and thus a wage couldn't be paid out. Plus I would have wasted a large amount of annual allowance for the tax year.

The accounting help on here is far superior to what I have ever received from my paid advisors. Things will have to change, and soon.

Regards

 

[elaine@cheapaccounting]

Do you have a P60?

 

[David Griffiths]

SA figures should be as per your provided P60

I'm not sure that I agree with that. It is self assessment and if you know that a document is wrong, then surely the correct figure should be returned?

 

[elaine@cheapaccounting]

But surely given the fact that you would have had the p60 since last July you would have got it corrected by now!!!

 

[David Griffiths]

But surely given the fact that you would have had the p60 since last July you would have got it corrected by now!!!

Only if you'd looked at it more than three days before the SA deadline!

 

[Jenni384]

I'd be inclined to declare salary of £5200 (or whatever the actual number was) as the OP is sure the Payroll was run incorrectly. Ltd Co filed the P14/P35/P60 incorrectly.

It was wages
It wasn't a dividend (or the OP would have vouchers, right?)
It wasn't a loan

So it was wages - thats the basis on which he received it.

Edit: clicked post quick reply not go advanced to finish the post with smileys!! :redface:

 

[elaine@cheapaccounting]

Only if you'd looked at it more than three days before the SA deadline!

well quite

 

[Jenni384]

We 3 are all clearly finished if we've got enough time to be on here

 

[elaine@cheapaccounting]

We 3 are all clearly finished if we've got enough time to be on here

Yeahhhhhhhhhhhhhhhhhhh

 

[elaine@cheapaccounting]

If employer annual returns have not been filed - fines are £100 / month.

 

[David Griffiths]

We 3 are all clearly finished if we've got enough time to be on here

Speak for yourself! Seven left, but all basically under control just waiting for the last bits of information in most cases. Last two weeks have been manic.

A few years back we got the last returns out with three days spare, but this year everybody has left it late. We'll be introducing a tiered pricing system next year, but at least having to do the March company accounts by Christmas will move some of the pressure away from January.

Over the last few years we have consistently dealt with over 40% of all returns in the last two months. This year, at the beginning of January, 10% of return cases hadn't even sent the records in. Ok, seven didn't show up at all but the others did and have now been in panic mode for a few days.

 

[elaine@cheapaccounting]

7 left - blimey!

Get your finger out mate

 

[Jenni384]

Owch David, that's not my kind of January!

We'll be introducing a tiered pricing system next year

This works really well for us - tell the client it costs more the later it comes in and magically (nearly) everything appears by the end of the summer. We don't want to charge more, of course, we just want the work in in plenty of time!

I haven't finished, actually. I have to hit 'submit' on one return which proves that PAYE codes are a bit of a farce: round income down, round tax up - and they still owe 20p when they were on the right tax codes over 3 jobs.

 

[elaine@cheapaccounting]

tax doesn't have to be taxing

 

[NewDelhi]

The P60 details the figure 1733.

In hindsight this should have been amended a long time ago, however the reality is that its been ignored, and now we're at the last, last minute.

Is there a viable option to amend the P60 now?

Bearing in mind that there is no tax deductable on the salary anyway, is it possible to submit a non-disclosure form of some type?

Help appreciated, once again.

 

[Jenni384]

I wouldn't use the P60 figures, I'd use the actual wages figures.

It's the P60 that's wrong, not your records of what you were paid as a wage.

Just my opinion based on limited facts.

The alternative is enter as per the P60 and enter the balance in the "other income not included elsewhere" section. But that's potentially wrong - because we are told it was a wage

Moral of story to readers: sort things out in good time

 

[NewDelhi]

The problem is that I have a morale responsibility towards the company aswell. So if submitting my 'full wage' in the SA is going to land the company in hot water, then its a no go really.

I basically need the best solution for both parties.

Is there any way that the PAYE can be amended, or indeed ignored (to the extent that there was no taxable income anyway) and therefore I can submit the full 5200 on my SA?

Alternatively, could I convert the remaining balance (5200-1700) to a dividend and have the dividend paperwork drawn up and backdated?

Kind Regards

 

[Jenni384]

In which case you could use the figures on the P60 and enter the balance in the "other income not included elsewhere" section.

What is the balance of the payments recorded as in the company's books?

And no, technically you can't backdate a dividend. You already said that all involved viewed the payments as wages.

You really need to talk to the company's accountant to sort this out.

 

[David Griffiths]

The problem is that I have a morale responsibility towards the company aswell. So if submitting my 'full wage' in the SA is going to land the company in hot water, then its a no go really.

I basically need the best solution for both parties.

Is there any way that the PAYE can be amended, or indeed ignored (to the extent that there was no taxable income anyway) and therefore I can submit the full 5200 on my SA?

Alternatively, could I convert the remaining balance (5200-1700) to a dividend and have the dividend paperwork drawn up and backdated?

Kind Regards

To put it bluntly, you have two options.

Choose one.

 

[elaine@cheapaccounting]

To put it bluntly, you have two options.

Choose one.

He is just grumpy because he has 7 SAs to do.

No I stand corrected - he is always like that

 

[elaine@cheapaccounting]

Who would draw up the dividend paper work.

With respect you are not going to sort this here. We cannot correct it.

Go back to the directors and / or accountant of the company and ask them or decide on your course of action

 

[David Griffiths]

He is just grumpy because he has 7 SAs to do.

No I stand corrected - he is always like that

5 actually!

My kids gave me Grumpy Old Men Extreme for Christmas!

 

[NewDelhi]

Thanks very much for everyone's help. I'm genuinely impressed to get 3 pages of responses before lunchtime.

I shall take the advice and talk with the powers that be.

Regards

 

[elaine@cheapaccounting]

5 actually!

My kids gave me Grumpy Old Men Extreme for Christmas!

Gave you it - you starred in it

I hear you are up for an Oscar

 

[David Griffiths]

He is just grumpy because he has 7 SAs to do.

No SA returns to do now.

Still grumpy, of course.

 

[Jenni384]

No SA returns to do now.

Still grumpy, of course.

Congrats David.

On the grump, not the returns, obviously