SJD Advice on RTI Changes to payroll

[ThomserveBAS]

My accountants view on RTI...

RTI FAQs - Brookson Ltd

...basically, nothing will change for me.

[midnite70]

The advice is definitely to take your salary 12 months in arrears. It seems to me that they are suggesting it mostly to reduce their own admin work but they have flowered it up with some other reasons for doing it such as, you must take salary on a particular day and you cannot go back and retrospectively adjust salary payments without being fined by HMRC. I'm not sure why anyone would retrospectively change salary but there you go.

A snippet from the email is below

"SJD Accountancy’s Solution:

We recommend that instead of continuing to take a monthly salary, you should take a one off annual salary at the end of the tax year (March 2014). For the other 11 months of the tax year you can just take your income in the form of dividends. "

I will give them a call anyway and see what they have to say

[jamesbrown]

I imagine it's an admin. issue and, by taking the salary in arrears, you avoid the complexity of a loan situation.

Some discussion here:

http://forums.contractoruk.com/accou...y-advance.html

Report back when you've called them

[northernladuk]

Hmm, that is a little bit cheeky but doesn't really make a difference, just take more dividends per month to cover and then no divi last month or I guess. Bit of extra work with an odd last 2 months of the years maybe.

[midnite70]

This is even more cheeky, what is the implied message behind this line

"For SJD Accountancy, this will minimise the number of RTI submissions we are required to make for your company. Therefore, even with the additional administration involved, the RTI submissions would mean no increase in your accountancy fees. "

[northernladuk]

This is even more cheeky, what is the implied message behind this line

"For SJD Accountancy, this will minimise the number of RTI submissions we are required to make for your company. Therefore, even with the additional administration involved, the RTI submissions would mean no increase in your accountancy fees. "

Dunno, it is increased workload I guess. I don't know what they have to do to do this but times it by 11k isn't going to be minutes.

[jamesbrown]

This is even more cheeky, what is the implied message behind this line

"For SJD Accountancy, this will minimise the number of RTI submissions we are required to make for your company. Therefore, even with the additional administration involved, the RTI submissions would mean no increase in your accountancy fees. "

I wouldn't necessarily call it cheeky, even if it's an admin. issue. It's in their (and your) interest to minimize time and, therefore, costs. I haven't actually looked into the additional burden yet though. I suppose you'd be losing about £70 in interest over the year when taking the salary at year end compared to a monthly salary during the year (i.e. 0.5 * 2% * £7488).

[northernladuk]

I wouldn't necessarily call it cheeky, even if it's an admin. issue. It's in their (and your) interest to minimize time and, therefore, costs. I haven't actually looked into the additional burden yet though. I suppose you'd be losing about £70 in interest over the year when taking the salary at year end compared to a monthly salary during the year (i.e. 0.5 * 2% * £7488).

Why? You can take more divi in the month as there isn't a wage outgoing. It's only different on paper surely?

[jamesbrown]

Why? You can take more divi in the month as there isn't a wage outgoing. It's only different on paper surely?

I don't know about you, but I'd generally plan on taking a large dividend up to the higher rate band (leaving some margin) early in the tax year (I'm implicitly assuming the normal scenario of having retained profit in the company). If you're thinking about a tapered monthly dividend, that sounds like a rather a pathological scenario, unless I've misunderstood you.... I think the only difference is that the £7488 is delayed. I suppose you could "ignore" the first year and view it as £7488 at the "start" of each year.

[northernladuk]

I don't know about you, but I'd generally plan on taking a large dividend up to the higher rate band (leaving some margin) early in the tax year. If you're thinking about a tapered monthly dividend, that sounds like a rather a pathological scenario, unless I've misunderstood you.... I think the only difference is that the £7488 is delayed. I suppose you could "ignore" the first year and view it as £7488 at the "start" of each year.

I aim to take one a year right at the beginning of the year personally so I can re-invest it somewhere it will earn me something.. or as fast as I can if I can't make it in a single one. Thinking about it year in arrears means I can't put the 7k or so away over the year though Hmmm.....

Dunno about 'ignore' the year. I don't personally want to get ahead as suggested in that thread though.

Will speak to them when I get my mail I think.