Pay Salary in advance

[steve101]

Hi All,
I have a question regarding paying salary in advance and expenses in an ltd company.

Since the personal tax year has just finished but not the one for my company, is it possibly to to pay me my annual salary in one lump sum payment and record it as an expense?

Thanks in advance!

Steve

[pmeswani]

Why would you record your Salary as an expense?

You really need to speak to your Accountant about this and ask how you could take your salary and how it should be recorded.

Just remember, if HMRC do an investigation against your company (IR35 or a spot check), they may ask why you took a lump sum salary and declared a smaller amount on the PAYE submission.... and you better have a good explanation.

[cojak]

Hi All,
I have a question regarding paying salary in advance and expenses in an ltd company.

Since the personal tax year has just finished but not the one for my company, is it possibly to to pay me my annual salary in one lump sum payment and record it as an expense?

Thanks in advance!

Steve

No.

NEXT!

[pmeswani]

No.

NEXT!

Subtle, but fair.

[Clare@InTouch]

Paying the salary in advance would create a loan, and that would be subject to the usual loan taxes - benefit in kind if over £5,000 and potentially s455 if it crosses a year end.

[Wilded82]

Hi All,
I have a question regarding paying salary in advance and expenses in an ltd company.

Since the personal tax year has just finished but not the one for my company, is it possibly to to pay me my annual salary in one lump sum payment and record it as an expense?

Thanks in advance!

Steve

I think you should seek accountancy advice, salary is not deemed the same as an expense and you should be making the most out of your tax allowances, also make sure you look at NI as if you don't "contribute" you lose out on statutory benefits.

[Platypus]

Paying the salary in advance would create a loan, and that would be subject to the usual loan taxes - benefit in kind if over £5,000 and potentially s455 if it crosses a year end.

Really? Is there something about a salary that means it must be paid in 12 monthly or 52 weekly instalments?

The advice in this thread is completely at odds with your own:
Salary as a lump sum - UK Business Forums

[Platypus]

salary is not deemed the same as an expense

Salary is a company expense,

A salary is a payment made to the director by the company through PAYE. It is deducted as an expense in the accounts and therefore reduces the amount of corporation tax that the company has to pay

See Contractor limited company Director's remuneration strategy. How contractors might divide income between salary, expenses and dividends

Get out of the mindset that thinks of an "expense" as a rail ticket or other reimbursable incidental.

[Clare@InTouch]

Really? Is there something about a salary that means it must be paid in 12 monthly or 52 weekly instalments?

The advice in this thread is completely at odds with your own:
Salary as a lump sum - UK Business Forums

Salary in advance is a loan - paying a big salary in one month is fine. It depends what way you look at it!

[Hex]

Salary in advance is a loan - paying a big salary in one month is fine. It depends what way you look at it!

Surely the OP is asking about paying all of his yearly salary in a lump sum so that it falls into the current company tax year, rather than paying it in 12 instalments where it will straddle his company tax year. I would have thought this was OK. Any reason why not?