PAYE confusion when going back to permie while Ltd is still ticking for a while

[Ned]

Hey

I've taken a permanent role after contracting for 3 years. Same net revenue, so made sense to me. I want to have my ltd still ticking, so I'm still a director doing zero PAYE submissions. I'm basically doing zero submissions, because there isn't any to take out.

When I joined the company earlier this month , I didn't have a P45, so I filled in the new starter questionnaire and ticked:

C) As well as my new job , I have another job or receive a State or Occupational Pension

The company I'm working for now, is saying they until I quit that job, they will put me on BR tax code 20% and I will be responsible for paying what I really owe to HMRC.

This seems wrong. I just want to pay what I owe as I earn , and forget about it, you know PAYE? Anyone else have experience with this?

[ladymuck]

As you're still a Co Director, you can sort the tax out at the end of the year via your SAR.

BR code is what gets applied in the absence of a P45. So, you could deregister YourCo from PAYE and issue yourself a P45. IANAA so double check with your accountant.

[SueEllen]

You do self assessment anyway so you can do it on your self assessment return

[fidot]

You don't need to wait until doing your self assessment.

Once you have had your first payslip from your new employer, you can phone HMRC up and apportion your tax code across the 2 jobs in whatever amount you want.

They will ask a few questions about expected income from each of the employers and then send new tax notices to them both.

[Michael at BI Accountancy]

As Ladymuck says - If you want to make things nice and easy, end your employment with your Ltd company and issue yourself a P45 which your new employer can use.

HMRC gets confused to say the least when there is effectively two employments going on. Potentially you could get them to allocate all your allowance to your perm tax code and BR your limited company employment.

Or sort it all out on the end of year SATR.

[Ned]

My "cloud" accountants said, I can't be a director and not be PAYE registered. So I assume I would need to start liquidation proceedings if I wanted to deregister and get a P45? I'm not ready for that yet.

Sounds like I will just wait for the first pay slip and phone up HMRC for more suitable tax codes. As people say, I will still need to do SA anyway as I owe HMRC dividend tax.

Thanks for clarifying so quickly , guys

[Michael at BI Accountancy]

My "cloud" accountants said, I can't be a director and not be PAYE registered. So I assume I would need to start liquidation proceedings if I wanted to deregister and get a P45? I'm not ready for that yet.

Sounds like I will just wait for the first pay slip and phone up HMRC for more suitable tax codes. As people say, I will still need to do SA anyway as I owe HMRC dividend tax.

First part is a load of rubbish.

As for waiting, really you should get onto HMRC ASAP. They will then issue the updated tax code to your employer for them to use on the next RTI submission. No point waiting if the code is wrong.

[ladymuck]

Deregistering from PAYE is not the same as closing down your company. You're simply telling HMRC that you have no employees. You can still have a director, who draws dividend income (which is not PAYE income)

[cojak]

Deregistering from PAYE is not the same as closing down your company. You're simply telling HMRC that you have no employees. You can still have a director, who draws dividend income (which is not PAYE income)

Absolutely agree with both Michael and SE.

Go back and explain this to your idiot accountant.

[fidot]

As for waiting, really you should get onto HMRC ASAP. They will then issue the updated tax code to your employer for them to use on the next RTI submission. No point waiting if the code is wrong.

When I went through this last year, HMRC wouldn't deal with the issue until the first RTI submission was received from the new employer.