PAYE & NI Payment Question

**LisaContractorUmbrella** · 5 March 2012, 14:34

What are you paying your self in salary??

And yes you should definitely change accountants

**rich2k** · 5 March 2012, 14:37

in salary i am paying myself 7200 approx 600 net per month

**Clare@InTouch** · 5 March 2012, 14:56

Originally posted by rich2k View Post

Hi All,

Im sure this will be a simple question for one of you guys because im pretty clueless.

Well im an IT contractor and started up my LTD back last july so i have been paying myself a mix of dividends and salary.

Now initially there was a delay registering for a paye reference but i finally got that sorted and was sent one in january.

I asked my accountant if i needed to do anything and he said dont worry about it we will sort it at the end of the tax year when i do your paye and he said you wont have to pay anythin because your on 7200.

So then last week i receive a letter saying that you are a new employer but have not yet paid PAYE. so i was straight on the phone to him and said what do i do with this, he asked for paye ref and accounts office reference and said he will sort it. well he has been delayed and said he will sort it tommorrow.

Does all this sound right or should i be paying something each month paye and NI?

Thanks in advance

and before you say it, yes i am thinking of changing accountants

This situation is common when you first set up a scheme. If you're paying below the PAYE limits then there's nothing to pay so you just let HMRC know each quarter by filing a nil return, which you can do online here: HM Revenue & Customs: No PAYE/NICs payment due

Often HMRC send a reminder because they think PAYE is due for a month, and all you need to do is submit a nil return for that month to correct their records. You'll need the longer PAYE reference which will be something like 064PQ0012345.

It's takes HMRC a while to understand you're paying each quarter rather than each month, so sometimes you get erroneous demands, it's not necessarily your accountant's fault on this.

**rich2k** · 5 March 2012, 15:08

that puts my mind at rest

thanks for that

**rich2k** · 5 March 2012, 15:10

So would a salary of 7200 mean that no NI or Tax was due?

**Clare@InTouch** · 5 March 2012, 15:19

Originally posted by rich2k View Post

So would a salary of 7200 mean that no NI or Tax was due?

There would usually be some NI due on that. The limit for NI is £589 a month.

**LisaContractorUmbrella** · 5 March 2012, 15:23

There could be tax due as well depending on what your tax code is

**rich2k** · 5 March 2012, 15:29

Thanks for all the replies, always great the quick response here!

Also any tips on changing accountant? i have been recommended one by friends who are contractors so think i will move to her.

So far my accountant created the company etc in july which i paid him for, up to now has not done anythin apart from answer or not answer a few texts or emails!

**Clare@InTouch** · 5 March 2012, 15:37

Originally posted by rich2k View Post

Thanks for all the replies, always great the quick response here!

Also any tips on changing accountant? i have been recommended one by friends who are contractors so think i will move to her.

So far my accountant created the company etc in july which i paid him for, up to now has not done anythin apart from answer or not answer a few texts or emails!

Swapping should be easy, it's generally just a case of signing new engagement letters and passing an ID check to ensure you're not on the FBI most wanted list or money laundering. Check your new accountant isn't going to charge you for catch up work.

If both accountants are regulated then you shouldn't have any problems at all.

PAYE & NI Payment Question