Urgent: I paid myself too much salary !

[radish2008]

That's mainly right.

In a nutshell I got the email saying because of RTI pay yourself 9350 next year in March as a lump sum. I agreed to this.

One embolism later I started paying myself £1 a month thinking I was doing the right thing. So no tax or NI and no payroll throughout they year with me thinking I have tax to pay next month.

And here I am. So 11k as directors loans and a possible investigation (as advised by my accountant) OR 12k as net salary and £2,300 tax the pay next month.

[radish2008]

You should feel like an idiot. You've been totally incompetent with your company finances, from the sounds of things.

thanks for that.

[Craig@Clarity]

I think that because of the fact I should have been notifying HMRC of salary payments through RTI (no RTI submission have been made) then I would have to make backdated submissions and that is where the complications would be.

I'm speaking theoretically as I don't know how your accountant has structured your wages. If you've been advised to take a lump sum next month, then the money you've been taking each month until now should be treated as a loan anyway or as a dividend if that was intended.

If you were taking the £1k as a "Net Wage" then in reality, you should have made RTI submissions 'on or before' salary payments were made.

[Craig@Clarity]

That's mainly right.
And here I am. So 11k as directors loans and a possible investigation (as advised by my accountant) OR 12k as net salary and £2,300 tax the pay next month.

Not sure where the £11k loan would create an investigation. Bit extreme!

[TheCyclingProgrammer]

And here I am. So 11k as directors loans and a possible investigation (as advised by my accountant) OR 12k as net salary and £2,300 tax the pay next month.

I don't think you get to choose how to treat your payments to date. IANAA so you will need to ask yours or wait for an accountant on here to confirm, but I'm pretty sure that in the absence of any payroll or dividend paperwork, your payments to date are a directors loan.

If you make the PAYE submission as advised by your accountant, then you can offset the salary declared against your loan and pay off the balance by declaring a dividend (assuming you have enough retained profit to do this). Clearing the loan correctly should be your first priority.

Your second priority is to resolve the issue of the BIK on the loan. Check with your accountant to see if NI is chargeable on the whole loan or just the amount over £5k (I think it might be the former). You will need to declare this on your P11D and pay Class 1A NI contributions.

You're unlikely to get investigated if you do this correctly. This is what you pay your accountant for.

[DirtyDog]

Your second priority is to resolve the issue of the BIK on the loan. Check with your accountant to see if NI is chargeable on the whole loan or just the amount over £5k (I think it might be the former). You will need to declare this on your P11D and pay Class 1A NI contributions.

It's the former. But you only need declare it if you don't pay interest on it.

[TheCyclingProgrammer]

It's the former. But you only need declare it if you don't pay interest on it.

I suppose the interest could be calculated to-date and re-credited to the DLA (thus increasing what is owed); but would crediting it to the DLA compound the interest? If not then this is probably much easier than faffing around with NICs.

[northernladuk]

And here I am. So 11k as directors loans and a possible investigation (as advised by my accountant) OR 12k as net salary and £2,300 tax the pay next month.

I don't see what the fuss is. You have two options from your accountant. Sit down and ask him to explain them or at least which is cheaper for you. Forget the threat of investigation. It's more possible you well get run over by a bus crossing the road to go see him. You don't have anything else going wrong you are trying to cover up? So what's the worry.

You pay him to service your accounts as directed by you so understand your two options and then just advise him to make it right. If he has clearly explained his next actions and you want a second opinion then post here. Better that than let a bunch of strangers try and put your accountant right.

Nothing to get your knickers in a twist really. It's all taxed on the way out at some point so a bit extra in this instance isn't the end of the world.

You ******* moron

[d000hg]

have been paying myself £1k a month giving me a net salary 2013/14 of £12k and a potential tax bill of £2,300 due next month.

I'm a bit confused. Why are you having to pay £2300 tax on a salary of £12k? Surely you're taxed ON £2300?

[radish2008]

I don't see what the fuss is. You have two options from your accountant. Sit down and ask him to explain them or at least which is cheaper for you. Forget the threat of investigation. It's more possible you well get run over by a bus crossing the road to go see him. You don't have anything else going wrong you are trying to cover up? So what's the worry.

You pay him to service your accounts as directed by you so understand your two options and then just advise him to make it right. If he has clearly explained his next actions and you want a second opinion then post here. Better that than let a bunch of strangers try and put your accountant right.

Nothing to get your knickers in a twist really. It's all taxed on the way out at some point so a bit extra in this instance isn't the end of the world.

You ******* moron

Cheers NLUK. :-)