LTD company - Employee payment advise???

[Sausage Surprise]

Sounds like a Bob plan....

I agree

[DiscoStu]

Thanks for the reply.. Please elaborate the additional tax term? Is it corporation tax ? I guess corporation tax paid on the net profit and this £5k is sale commission, comes under expenses right?

You say you've already set this company up, in that case I suggest you appoint an accountant. Quickly.

[TheCyclingProgrammer]

Thanks for the reply.. Please elaborate the additional tax term? Is it corporation tax ? I guess corporation tax paid on the net profit and this £5k is sale commission, comes under expenses right?

For your co, the £5k you pay the employee is an expense, as is any employers NIC on top.

For the employee, the £5k is income and they pay income tax and employees NIC and this is deducted through your payroll system.

[everfor]

Yes, you can pay £5k into their personal account.

Since they are your employee, you would record this £5k bonus on their payslip, and pay the appropriate additional tax and NI to HMRC. If you have already paid them £5k, you would pay this from your company funds.

Good luck with the new business.

Thanks for the reply.. Please elaborate the additional tax term? Is it corporation tax ? I guess corporation tax paid on the net profit and this £5k is sale commission, comes under expenses right?

[everfor]

You mean pay them £5K without informing the tax man?

Yes you can do this, but you'll probably end up in jail.

I am newbie on this field, i am trying to find out the legal way and procedure how commission will paid to employee?... I don' t want break the law or hide from taxman..

[TheFaQQer]

After deduction of comm + salary total is 5k. --> From ltd company, is it possible to pay 5k directly to their employee personal account?

Yes, you can pay £5k into their personal account.

Since they are your employee, you would record this £5k bonus on their payslip, and pay the appropriate additional tax and NI to HMRC. If you have already paid them £5k, you would pay this from your company funds.

Good luck with the new business.

[TheCyclingProgrammer]

Are you registered as an agency, how are you going to tax your employees, insurances sorted, pension scheme, have you thought this through and what does your accountant say?

Sits back to enjoy the ride......

Running a consultancy and hiring out your employees to clients is a fairly standard business model and I wouldn't have said that makes OP an agency (as in employment business which I assume is what you mean).

Only paying the "employees" for work they do might change things but if they are being paid a basic salary that meets NMW then I don't see that it matters.

[stek]

You aren't registered in the IOM by any chance.

I think this one falls under the jurisdiction of Cloud Cuckoo Land.

[TheCyclingProgrammer]

OP posted the same thing in UK Business Forums. My answer here is the same: you pay them their "bonus/commission" as that's essentially all it is, through the payroll along with the rest of their wages.

Also, you need to ensure they are being paid NMW am regardless of what clients they are working on.

[TheDandy]

You aren't registered in the IOM by any chance.

[stek]

You mean pay them £5K without informing the tax man?

Yes you can do this, but you'll probably end up in jail.

Sounds like a Bob plan....

[Batcher]

[VectraMan]

After deduction of comm + salary total is 5k. --> From ltd company, is it possible to pay 5k directly to their employee personal account?

You mean pay them £5K without informing the tax man?

Yes you can do this, but you'll probably end up in jail.

[stek]

Are you registered as an agency, how are you going to tax your employees, insurances sorted, pension scheme, have you thought this through and what does your accountant say?

Sits back to enjoy the ride......

[everfor]

I have setup new IT consultancy LTD company, i am going to hire the employees with minimum monthly basic salary. Each employee will work with my client, and based on their revenue, i'll keep the small margin, rest of difference will be paid to employee. My question, how the difference amount will be paid to employee account.

For example,

Monthly revenue from employee 10k + vat
My commission -3k
salary to employee - 2k including NI.
After deduction of comm + salary total is 5k. --> From ltd company, is it possible to pay 5k directly to their employee personal account?

Please advise, how to represent this transaction in account? Appreciate your reply?