Reply to: CJRS - Furlough - Claim without RTI setup?

[Chart Accountancy]

No, I can declare as dividend though I intend to take as salary but upon knowing RTI was not setup by accountant they will be dividend.

Anyways my original question was of eligibility to claim given the details in my 4th post and if there have been any lapses by the accountant here .

Thanks

If you did not have a payroll scheme in operation and you did not declare any salary by the 19th March, then unfortunately you will not be eligible to make a claim. The scheme does not allow claims to be based on late submissions after the 19th March for 2019/20 as this could open the scheme to fraud which is clearly not the case with many who have missed to make a submission but this has been set up as the cut-off date so if the submission to declare a salary was not made by then, it is not possible to claim under the scheme.

If you did not have a payroll registration in 2019/20, you can still declare a director' salary at the LEL NIC threshold which will be £512 for 2019/20 and £520 for 2020/21.

[northernladuk]

This question actually has real merit - I along with others have properly declared their employment income on their self assessments but never did set up RTI PAYE either because they did not know or because they were running a small company

So despite the SA showing the income this scheme is not open to us - Is that the correct way of thinking about this?

If you meet the criteria it's open to you. If you don't, it's not.

[LondonPM1]

You can claim the moon is made of cheese. That's within the law. You'll not prove it though.
So you can make a claim against the accountant. The question should be, can you afford to claim against the accountant, and are you likely to win?

This question actually has real merit - I along with others have properly declared their employment income on their self assessments but never did set up RTI PAYE either because they did not know or because they were running a small company

So despite the SA showing the income this scheme is not open to us - Is that the correct way of thinking about this?

[Lance]

I understand re taking a nil salary if I am returning from perm. However as I've mentioned few times the accountant did not ask what salary I want, did not setup nil payment/ RTI and niether advised I should be taking no salary due to tax reasons.

All these were discussed only when I enquired about making a CJRS claim. So my questions were only

- Can I still make a claim given my situation?
- Legally is there any claim against the accountant

Thanks

You can claim the moon is made of cheese. That's within the law. You'll not prove it though.
So you can make a claim against the accountant. The question should be, can you afford to claim against the accountant, and are you likely to win?

[Ardesco]

No and No

[konsultant]

If he's been perm for more than half the year it won't have been efficient for him to pay himself anything for the remaineder of the year. It's common practice. No one will have discussed him taking a salary but he did it anyway. I'd put money on it the former was explained and he missed/didn't understand it.

If I were the OP I'd be making some polite enquiries first before blaming the accountant.

I understand re taking a nil salary if I am returning from perm. However as I've mentioned few times the accountant did not ask what salary I want, did not setup nil payment/ RTI and niether advised I should be taking no salary due to tax reasons.

All these were discussed only when I enquired about making a CJRS claim. So my questions were only

- Can I still make a claim given my situation?
- Legally is there any claim against the accountant

Thanks

[northernladuk]

Correct, it wouldn't have made any difference with your COVID related claim, but still raises questions about the accountant.

I was in perm and returned to contracting towards end of 19. At this point, niether me nor accountant discussed about setting up payroll/ RTI.

If he's been perm for more than half the year it won't have been efficient for him to pay himself anything for the remaineder of the year. It's common practice. No one will have discussed him taking a salary but he did it anyway. I'd put money on it the former was explained and he missed/didn't understand it.

If I were the OP I'd be making some polite enquiries first before blaming the accountant.

[zonkkk]

Thanks, yes it is part of accounting package, but a 80% of nil payment would have been 0 in that case

Correct, it wouldn't have made any difference with your COVID related claim, but still raises questions about the accountant.

[konsultant]

Depends on your accounting package but the accountant should have asked you if you want to take salary from the company and set it up for you.
If taking a salary would not have been efficient for your tax situation (i.e. you went over the NI threshold due to your previous PAYE income for the year), RTI should have been set-up and reported to HMRC as 0 if you don't have any other PAYE income.
Who is your accountant?

Thanks, yes it is part of accounting package, but a 80% of nil payment would have been 0 in that case

[GhostofTarbera]

That is true wrt paying more tax, but the accountant never advised to not take any salary.

The whole salary discussion only came around when I enquired about CJRS and it is then we realised that RTI was not setup.

I wanted to understand my options about eligibility based on this situation or what else can I do? As I am not generating income since March but the only thing is RTI was not setup. I have generated invoices till Feb.

I repeat you just took random loans from your business account - not a salary or dividend

Get a bounce back loan


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[zonkkk]

Depends on your accounting package but the accountant should have asked you if you want to take salary from the company and set it up for you.
If taking a salary would not have been efficient for your tax situation (i.e. you went over the NI threshold due to your previous PAYE income for the year), RTI should have been set-up and reported to HMRC as 0 if you don't have any other PAYE income.
Who is your accountant?

[konsultant]

If you've been perm part of the year it's often the case that it's not efficient to pay anymore salary as you'll be paying more tax on it than you need to so just stick to dividends for the rest of that year. I expect that's what the accountant was meaning. You paying yourself a salary wasn't part of his plan I'd imagine.

That is true wrt paying more tax, but the accountant never advised to not take any salary.

The whole salary discussion only came around when I enquired about CJRS and it is then we realised that RTI was not setup.

I wanted to understand my options about eligibility based on this situation or what else can I do? As I am not generating income since March but the only thing is RTI was not setup. I have generated invoices till Feb.

[Lance]

No, I can declare as dividend though I intend to take as salary but upon knowing RTI was not setup by accountant they will be dividend.

Anyways my original question was of eligibility to claim given the details in my 4th post and if there have been any lapses by the accountant here .

yeah.no..... that's not how dividends work. You don't declare a dividend after the fact any more than you do salary.
It's a loan like GoT said.

[konsultant]

You have taken loans out of your company

Not salary or dividends (as not declared)

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No, I can declare as dividend though I intend to take as salary but upon knowing RTI was not setup by accountant they will be dividend.

Anyways my original question was of eligibility to claim given the details in my 4th post and if there have been any lapses by the accountant here .

Thanks

[northernladuk]

If you've been perm part of the year it's often the case that it's not efficient to pay anymore salary as you'll be paying more tax on it than you need to so just stick to dividends for the rest of that year. I expect that's what the accountant was meaning. You paying yourself a salary wasn't part of his plan I'd imagine.