Directors, payroll, and sending money to HMRC

[dmini]

Can an accountant advise please - a friend I work with has a new limited company. Its been running since December - and he has been taking payroll out of it. His accountant has said he doesnt have to worry about paying hmrc anything for PAYE until next October - after his company year end. This doesnt seem right - as PAYE end is April, and we're now in the throes of IR35 Q6 and such likes- is this ok - is there some way his accountant is going to run this legally - or is he being given dodgy advice

[THEPUMA]

If he is drawing a salary below the NI threshold (£450 pcm) and topping this up with dividends, then no PAYE or NI might ever be due.

The reference to a due date after his year end may refer to corporation tax. It seems unlikely that it could refer to PAYE/NI.

[dmini]

His accountant hasn't given him any advice as to how she would suggest it was split - he is just pulling out a lump of money each month at the moment with very little if any paperwork to back it up. He hasn't the paperwork in place to do P60s or ANYTHING to the best of my knowledge for the year just finished and hasn't supplied such to his accountant, so won't have the paperwork in place for the SA forms.We are definitely talking PAYE - as far as he is aware at year end, as well as the Corp tax stuff.
As his accountant advised him not to go on flat rate, because he wanted to buy a laptop, and wouldnt be able to reclaim the VAT - which realistically would be about 1 months flat rate reclaim on his rate, costing him lots of money, I have very large reservations about any of their advice. I have tried to learn a lot over the past couple of years, but am not an accountant, and cannot turn round definitively and say that they are useless - that's what I want the good advice off yourselves for!!

[THEPUMA]

His accountant hasn't given him any advice as to how she would suggest it was split - he is just pulling out a lump of money each month at the moment with very little if any paperwork to back it up. He hasn't the paperwork in place to do P60s or ANYTHING to the best of my knowledge for the year just finished and hasn't supplied such to his accountant, so won't have the paperwork in place for the SA forms.We are definitely talking PAYE - as far as he is aware at year end, as well as the Corp tax stuff.
As his accountant advised him not to go on flat rate, because he wanted to buy a laptop, and wouldnt be able to reclaim the VAT - which realistically would be about 1 months flat rate reclaim on his rate, costing him lots of money, I have very large reservations about any of their advice. I have tried to learn a lot over the past couple of years, but am not an accountant, and cannot turn round definitively and say that they are useless - that's what I want the good advice off yourselves for!!

Sounds like you are right. Tell him definitively from me that his accountant is useless!

[xoggoth]

I believe there is such a thing as a director's bonus whereby one can pay salary at any time up to the following Jan 31st, so this may be what your accountant he has in mind. Prob best have a look on accountingweb.

I have seen it argued there by a chap who usually knew what he was talking about that this can be used to defer salary payment even if IR35 caught.