Pay Myself Using PAYE - Rebate?

**VectraMan** · 28 December 2006, 20:16

When you were a permie you would have been taxed assuming you were paid the same amount each month for a whole year. Because you've stopped and effectively taken a big pay cut, your total yearly pay will be less than expected, and so you paid too much early on.

**malvolio** · 28 December 2006, 20:35

Correct, but to take that one stage further, tax is actually calculated on gross earning to date from April 5th each year - i.e. you have earned £x, the tax/NI due is £y, you have paid £z to the taxman so far this year, so net take home this month is (£x - £y + £z). However, permies will be worked on a 12 month average, just so you get consistent amounts every month. Now you are into DIY-land, you are using the pure rules and anomalies will occur, but you are not necessarily out of pocket.

**dmini** · 29 December 2006, 10:25

You should have the "new employers pack" CD from HMRC. If not - get it. It is really useful. It has a calculations part- will do them for you - more accurately than half the "calculators" out there.
Your company will not have a coding notice yet - unless you have spoken to HMRC employers area already. In that case you use the tax code on your P45.
If you are only paying yourself up to the top of the 0% band, then some of your previous income where you paid 23%(?) will now come to fill in the 10% band you aren't using from November & December. So you will be due back tax on that. For most businesses it would just come out of the money due from other employees on PAYE. In your case I would guess it cannot - don't know how you handle that as I am NOT an accountant.

Personally, when my tax got complicated this year, as I moved from umbrella to Ltd, but also had a bit of PAYE as well which is ongoing, I spoke to the employers PAYE line, who were very helpful in our area (Southampton / Portsmouth) and they moved my tax codes as I wanted and told me I could use Month1 on my company PAYE till year end, and then sort it all out, through self assessment - which I fill in anyway (they give me money every year!). I did confirm it all in a letter to them though!

Talk to your accountant - they should be able to advise.

**Sockpuppet** · 29 December 2006, 12:53

Aye. I'm still waiting on it.

Need my employer ref id to order another one though...and frikking accountants being less than helpful.

**IR35 Avoider** · 29 December 2006, 12:54

Although I suspect the correct procedure is to feed data (from P45?) into the new payroll system, if you don't fix things that way you can always reclaim any overpaid tax by filling in a personal tax return.

**dmini** · 29 December 2006, 13:46

Are you sure they HAVE registered you? As you don't HAVE to register before you pay someone - I would suspect not - if you haven't been able to extract details out of them.
Try ringing the new employers line on 0845 60 70 143 to register! You have to supply company info, so you shouldn't be able to register twice! It doesn't affect their ability (or not) to act as your agent.
The other way - which may work - is ring up your old PAYE tax office (as defined on your old P45) You should have a note on your file as a director of the new company, if the accountants have done anything. At which point if you explain that you are trying to find out the new employee / employers PAYE refs and why - ie so you can pay yourself - and of course them any tax due, they may be nice enough to give you a few details to start the paper chase from that end!

**Sockpuppet** · 29 December 2006, 14:56

Nah, the first invoice I got from them to cover stuff such as formation fees, minutes etc, had on there set up PAYE Scheme with Inland Rev.

They are just being difficult I think becuase I refused to pay them £30 a month to do my payroll for me, and also wont let them do VAT as they wanted £100 to fill in 6 boxes ffs!

I can see me changing accountants very quickly if they keep this up.

**wantacontract** · 29 December 2006, 21:31

payroll

i was told that I don't need to do payroll as i am paying myself only £420 a month, outside of ni and tax.....

**malvolio** · 30 December 2006, 10:42

Originally posted by Sockpuppet

Nah, the first invoice I got from them to cover stuff such as formation fees, minutes etc, had on there set up PAYE Scheme with Inland Rev.

They are just being difficult I think becuase I refused to pay them £30 a month to do my payroll for me, and also wont let them do VAT as they wanted £100 to fill in 6 boxes ffs!

I can see me changing accountants very quickly if they keep this up.

I keep saying this and will one day get people to listen, but how much time does your DIY payroll take you to do over the year, allowing for creation of spreadsheets or other software work, checking that you haven't got it wrong and ensuring you meet all the deadlines? Multiply that by your hourly rate and double it. If it is less than £360, carry on doing it yourself.

If an accountant really costs you money then get a new one. Efficient ones are at the very least free of charge, and most likely save you money.

Pay Myself Using PAYE - Rebate?