Draw salary from my limited company when out of contract

[SlipTheJab]

My accountant stopped my payroll the moment I was more than 1 month out of contract. So not really sure if there is a legal requirement to do this.
Also I couldn't claim expenses anymore other than travel to do interviews.

It was not a leave, nothing planned, just out of contract looking for another one.

I'm not sure if this is right.

Have you tried asking him why?

[AnotherGuy]

Have you tried asking him why?

They actually did this after I asked them if everything is fine once I finished my contract, if I should change anything or just continue drawing salary and dividends as usual.

Then they replied to me asking when my contract ended and explaining to me they had to stop the payroll and I should stop claiming any expenses...

Basically I encouraged them to do this, with my simple question. At any moment I gave them the impression I wanted to close the company or make it dormant or whatever. Just out of contract looking for a new one.

[northernladuk]

They actually did this after I asked them if everything is fine once I finished my contract, if I should change anything or just continue drawing salary and dividends as usual.

Not a very smart question to have to ask though is it. I can't help thinking this isnt entirely the accountants fault

[pr1]

Not a very smart question to have to ask though is it. I can't help thinking this isnt entirely the accountants fault

Although it's maybe not worded very well, it's a fair question to ask...

Are you suggesting he should have posted it here and have the first reply be "have you asked your accountant"?

[WTFH]

AG, may I ask are your accountants UK based? Also, what expenses were you trying to submit?

[AnotherGuy]

AG, may I ask are your accountants UK based? Also, what expenses were you trying to submit?

Yes, UK based. Out of contract my only expenses are £18 use of home, travel for interviews, some hosting/server monthly charge, insurance and accountancy. Nothing fancy.

[northernladuk]

Although it's maybe not worded very well, it's a fair question to ask...

Are you suggesting he should have posted it here and have the first reply be "have you asked your accountant"?

Possibly, possibly not. It's arguable IMO but does just goes to show how not understanding something fairly basic can cause problems. Not having a very good accountant further exacerbates things as well unfortunately.

Anyway. I'd go back to him and ask him exactly why he thinks this and don't get off the phone until you fully understand what he is saying. If we can understand his argument we might have a better idea of what to do next.

[VectraMan]

Yes, UK based. Out of contract my only expenses are £18 use of home, travel for interviews, some hosting/server monthly charge, insurance and accountancy. Nothing fancy.

Were you trying not to pay for accountancy when not in a contract? That's the question that comes up here a lot. Sounds like the accountant was trying to make the company dormant and so not so much work for him, which isn't unreasonable if you were going to be out of contract for some time.

[AnotherGuy]

Anyway. I'd go back to him and ask him exactly why he thinks this and don't get off the phone until you fully understand what he is saying. If we can understand his argument we might have a better idea of what to do next.

I've been in contact with them and the explanation is they don't recommend to take salary while my company is not generating income as (textual) "you can’t justify to HMRC why you want to take salary when you are not working" and (textual) "they will see it as tax avoidance".

They said they are following HMRC guidance here

They give me the choice to continue taking salary but apparently they ask for a written consent in case I were to be investigated by HMRC in the future.

[VectraMan]

I've been in contact with them and the explanation is they don't recommend to take salary while my company is not generating income as (textual) "you can’t justify to HMRC why you want to take salary when you are not working" and (textual) "they will see it as tax avoidance".

They said they are following HMRC guidance here

They give me the choice to continue taking salary but apparently they ask for a written consent in case I were to be investigated by HMRC in the future.

Paying out money as salary is the very opposite of tax avoidance.