Pay Salary Yearly

[Wanderer]

That was reversed more recently - http://forums.contractoruk.com/accou...eme-fixed.html

Can I pay my annual salary for the 2014/15 year in advance on the 6th April 2014 or does it have to be in arrears on the 5th April 2015?

Are there other good reasons to hold off paying a salary till the end of the tax year (so you can reduce the salary slightly if you have received some BIK during the year etc)?

[Craig at Nixon Williams]

Can I pay my annual salary for the 2014/15 year in advance on the 6th April 2014 or does it have to be in arrears on the 5th April 2015?

If you paid a full year's salary in month 1 of the tax year then you will be taxed at source quite a bit as you will only get 1/12 of your tax allowances at that point. If you pay it at the end of the year then you will get 12/12 of the tax allowances and so (assuming you are on a standard tax code) you will not incur any tax on the salary.

Regardless of how you do it, it all works out in the end because you will complete a self-assessment after the end of the tax year but it is inconvenient to pay it then claim it back etc.

Hope this helps!

Craig

[Wanderer]

Hope this helps

It does indeed, thank you for that explanation.

I think I will stick with the monthly salary payments rather than waiting until the end of the year to draw the money...

[enteruk]

Could someone who applied for annual PAYE scheme confirm is it possible to apply online?

I can not find such link on HMRC site.

Thanks,

[PEEL]

Can I pay my annual salary for the 2014/15 year in advance on the 6th April 2014 or does it have to be in arrears on the 5th April 2015?

Are there other good reasons to hold off paying a salary till the end of the tax year (so you can reduce the salary slightly if you have received some BIK during the year etc)?

I can imagine there is a benefit to be had paying it in arrears if there is uncertainity of not becoming a perm - it may be beneficial to 'save' your personal allowance for your perm job and reduce how much you could be in the 40% income tax bracket. Just a thought although it could quite possibly be incorrect.

[Contreras]

Could someone who applied for annual PAYE scheme confirm is it possible to apply online?

I can not find such link on HMRC site.

PAYE registration is online but you need to telephone the helpline to have the company put on the annual scheme.

[enteruk]

Thanks, that helps.

[Project Monkey]

It's not necessarily a loan, though it's probably an accrual in the books.

Employment income: basis of assessment for general earnings: the time when earnings are received: payments on account of earnings: general: director's drawings
http://forums.contractoruk.com/accou...advance-6.html

It would be a pre-payment, not an accrual since the work hasn't been done yet.

If it were paid at the end of the year after the work had been done, then you could treat it as an accrual if you are doing monthly/quarterly accounts.