Originally posted by TheCyclingProgrammer
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Start-up first tax return
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Last edited by TheFaQQer; 15 August 2014, 18:14. -
Originally posted by Contreras View PostIn the circumstances, and assuming no tax liability, I think I'd quietly sweep that one under the carpet.
Originally posted by TheFaQQerThe OP had a job last year, though, so according to the HMRC document since it's a second job if they wanted to pay themselves a salary they would need to be operating PAYE and have declared the payments via RTI.
Something that just occurred to me which might explain why OPs accountant hasn't mentioned dividends is that it wouldn't be possible to take any dividends that are taxed in the previous tax year without backdating them. They can obviously declare a dividend now but it would be taxed in the current tax year.
Either way something is going to have to be done retrospectively and if I was OP I'd be pretty annoyed with myself and my accountant for not sorting this before the previous tax year ended, when there would have been a bit more room for manoeuvre without creative accounting.Last edited by TheCyclingProgrammer; 15 August 2014, 18:32.Comment
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More info
Thanks a lot CONTRERAS, TheCyclingProgrammer and TheFaQQer. I really appreciate you had taken your time to read the post and help me out.
In response to some of the questions:
1) I am self-employed (and registered for self assessment too)
2) The £15K profits are after reimbursement of the expenses/director loan
3) All expenses are genuine and have been well recorded
Having read all your comments, I guess the best option would be:
- Claim the approximately £10K costs originally paid by me. This would then be a cost to my company and I will keep that money. I think P11D does not apply to this case but I am not sure at all. Any help?
- The last payment for my former PAYE employment was in Sept 13. I am planning to record a salary of £470/month from Oct 13 to July 14. I assume that since is is a different employer, I do not go over the LEL threshold and therefore not having set up a PAYE for this salary may be OK (it is the only salary in the company). Any comments here?
- I will record this salary on my self assessment as a normal salary income.
- For 2014/2015 I am already taking the steps to set the PAYE salary + dividends scheme, which I believe is the most efficient solution for remunerations up to £40K.
Any comments/ideas/corrections on the statements above will be extremely appreciated.
Again, thanks all for your comments so far.Comment
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Originally posted by Lewis Segi View Post1) I am self-employed (and registered for self assessment too)Comment
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Originally posted by Lewis Segi View Post- Claim the approximately £10K costs originally paid by me. This would then be a cost to my company and I will keep that money. I think P11D does not apply to this case but I am not sure at all. Any help?
If you needed to complete a P11D, then you have missed the filing deadline for the last tax year, which would incur a penalty.
Originally posted by Lewis Segi View Post- The last payment for my former PAYE employment was in Sept 13. I am planning to record a salary of £470/month from Oct 13 to July 14. I assume that since is is a different employer, I do not go over the LEL threshold and therefore not having set up a PAYE for this salary may be OK (it is the only salary in the company). Any comments here?
Originally posted by Lewis Segi View Post- For 2014/2015 I am already taking the steps to set the PAYE salary + dividends scheme, which I believe is the most efficient solution for remunerations up to £40K.
Originally posted by Lewis Segi View PostAny comments/ideas/corrections on the statements above will be extremely appreciated.Comment
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My mistake
Originally posted by TheFaQQer View PostIf you are employed by a company, regardless of whether you own 100% of that company, you are NOT self-employed for tax purposes. You are an employee.
ThanksComment
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Originally posted by Lewis Segi View PostYou are right, sorry for the confusion. How about the other bits of the plan...does that make sense?
Thanks
Regarding the P11D, as I said before it depends what the expenses are. Business expenses can broadly be broken down into two groups:
* Expenses you incur in the course of doing your job - for most contractors this is normally business travel or travel to a temporary workplace (including any related accommodation and subsistence) + itemised business calls. You incur these costs personally, your company reimburses you and you claim personal tax relief on the reimbursement through your self-assessment to avoid paying extra tax. These costs are normally reported on a P11D (along with other things like BIKs) unless they are specifically exempt (e.g. AMAP mileage payments).
* Expenses your company incurs - this will normally include staff remuneration (salaries and expense payments), accountancy fees, equipment, stationary, admin costs, employer's NIC. These should normally be paid for by the company directly and bills should be in the company name wherever possible however HMRC accept that sometimes an employee will purchase things on its employer's behalf. As long you have your employer's permission and its clear to the supplier that you are purchasing on your business's behalf then you are entitled to be reimbursed without their being any personal tax implications and these payments don't have to appear on your P11D.
Based on the above you should be able to work out what needs reporting on a P11D and what doesn't.Comment
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