Originally posted by captainmichael
View Post
- Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
- Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!
Reply to: Limited Company Contractor to PAYE
Collapse
You are not logged in or you do not have permission to access this page. This could be due to one of several reasons:
- You are not logged in. If you are already registered, fill in the form below to log in, or follow the "Sign Up" link to register a new account.
- You may not have sufficient privileges to access this page. Are you trying to edit someone else's post, access administrative features or some other privileged system?
- If you are trying to post, the administrator may have disabled your account, or it may be awaiting activation.
Logging in...
Previously on "Limited Company Contractor to PAYE"
Collapse
-
-
Originally posted by Craig@Clarity View PostHi Michael,
To answer your question in a very basic form, you effectively state all your income (both salaries from being a PAYE contractor and limited company contractor, dividends, bank interest etc). Your personal tax is then calculated by deducting your personal allowance from your gross income and any tax paid at source (income tax taken from your small monthly self salary and PAYE contracting job) to leave either a balancing tax payment due by 31 Jan 2021 or a refund if you've paid too much during the tax year 19-20.
As others have asked, do you have an accountant? There are so many unanswered questions and pitfalls that you may be now subjected to (one being that it appears you may not have submitted any RTI's or final EPS for the last tax year). Based on your questions, I think you need to either do some more research into running a company and drawing up your accounts, corporation tax return and personal tax return or look to hire an accountant to save you time, money and future comebacks. If you plan on drawing dividends in the current tax year, are you aware of the tax rates, dividend allowance and tax implications of taking a dividend on top of your current level of salary?
We're not saying it's impossible to do all these yourself and indeed many people here do or have in the past but it does sound like you need more guidance, advice and research.
I no longer plan to withdraw a dividend for this year as I believe I will be paying tax at the higher tax rate which I want to avoid. I will look into my options but from reading other threads MVL might be the most likely option.
The way I have worked out my current self assessment tax (on excel for now) is:
- Income - salary from Limited Company + salary from PAYE + bank interest + dividend
- Less allowances - PA split between Limited company and PAYE + savings allowance + dividend allowance (2k)
- Tax calc - use Income Tax rates for salaries, which takes me to basic rate + use remainder of basic rate on dividend and tax the rest of the dividend at higher rate
- Less tax already paid through PAYE (which I believe covers salary only and not dividend)
- Final tax number
The above is what I wasn't sure about but unless I am missing anything fundamental I am more comfortable now.
I've completed a corporation tax return before and not went through an accountant so I should be ok doing that. The only thing that was new to me was effectively having two salaries from two sources while a 'large' dividend was withdrawn like I was only a Limited Co contractor. Which ultimately means I just need to pay more tax on that part.
Leave a comment:
-
Originally posted by captainmichael View PostHi all,
Apologies if this has been asked before but I couldn't find a related thread.
For tax year 19-20 I worked both as a limited company contractor and PAYE contractor and wanted to understand how to complete my self assessment.
From Apr 19 to Sep 19 I paid myself a small monthly self-salary and a dividend. From Dec 19 onwards I was paid via PAYE via the company I work for now.
I'm unsure how to complete my self assessment in regards to the self-salary and dividend. Since I am PAYE now, would any part of the self-salary already have been taxed? And would I still be able to use the personal allowance or would this have already been used part of the PAYE salary?
Also, I haven't done anything with regards to the HMRC PAYE tool. Would I need to submit the final submission and then leave there as an employee of my limited company.
I've kept my limited company open for now in case I return to it so it's basically sitting dormant from Sep 19 and I will need to do a corporation tax return as well. I am planning on withdrawing a dividend for the current tax year at some point.
If you are able to provide any advice or guidance that would be much appreciated.
Many thanks in advance
Michael
To answer your question in a very basic form, you effectively state all your income (both salaries from being a PAYE contractor and limited company contractor, dividends, bank interest etc). Your personal tax is then calculated by deducting your personal allowance from your gross income and any tax paid at source (income tax taken from your small monthly self salary and PAYE contracting job) to leave either a balancing tax payment due by 31 Jan 2021 or a refund if you've paid too much during the tax year 19-20.
As others have asked, do you have an accountant? There are so many unanswered questions and pitfalls that you may be now subjected to (one being that it appears you may not have submitted any RTI's or final EPS for the last tax year). Based on your questions, I think you need to either do some more research into running a company and drawing up your accounts, corporation tax return and personal tax return or look to hire an accountant to save you time, money and future comebacks. If you plan on drawing dividends in the current tax year, are you aware of the tax rates, dividend allowance and tax implications of taking a dividend on top of your current level of salary?
We're not saying it's impossible to do all these yourself and indeed many people here do or have in the past but it does sound like you need more guidance, advice and research.
Leave a comment:
-
Originally posted by LondonManc View PostAsk your accountant. Or maybe even get one?
I wouldn’t even begin to complete a self assessment in your situation.
Why draw attention to yourself if you make a mistake?
Leave a comment:
-
you'll get a P60 for the tax year from your employee. You'll also get from your company's accountant.
The two of those will need to be entered into the SATR portal, if it doesn't have them already from RTI.
And you input your dividends drawn into that section.
Why don't you start filling in that form and come here to ask specific questions when you have them?
Also, if you don't have an accountant, get one. Not for the SATR as that's easy. But if you don't know where to start with SATR I doubt you'll be able to do the CT without ballsing it up massively.
Leave a comment:
-
It's not dormant. It's sitting unused. Dormant is a whole different catagory that has a whole different set of rules and process.
Leave a comment:
-
Limited Company Contractor to PAYE
Hi all,
Apologies if this has been asked before but I couldn't find a related thread.
For tax year 19-20 I worked both as a limited company contractor and PAYE contractor and wanted to understand how to complete my self assessment.
From Apr 19 to Sep 19 I paid myself a small monthly self-salary and a dividend. From Dec 19 onwards I was paid via PAYE via the company I work for now.
I'm unsure how to complete my self assessment in regards to the self-salary and dividend. Since I am PAYE now, would any part of the self-salary already have been taxed? And would I still be able to use the personal allowance or would this have already been used part of the PAYE salary?
Also, I haven't done anything with regards to the HMRC PAYE tool. Would I need to submit the final submission and then leave there as an employee of my limited company.
I've kept my limited company open for now in case I return to it so it's basically sitting dormant from Sep 19 and I will need to do a corporation tax return as well. I am planning on withdrawing a dividend for the current tax year at some point.
If you are able to provide any advice or guidance that would be much appreciated.
Many thanks in advance
MichaelTags: None
- Home
- News & Features
- First Timers
- IR35 / S660 / BN66
- Employee Benefit Trusts
- Agency Workers Regulations
- MSC Legislation
- Limited Companies
- Dividends
- Umbrella Company
- VAT / Flat Rate VAT
- Job News & Guides
- Money News & Guides
- Guide to Contracts
- Successful Contracting
- Contracting Overseas
- Contractor Calculators
- MVL
- Contractor Expenses
Advertisers
Contractor Services
CUK News
- Streamline Your Retirement with iSIPP: A Solution for Contractor Pensions Sep 1 09:13
- Making the most of pension lump sums: overview for contractors Sep 1 08:36
- Umbrella company tribunal cases are opening up; are your wages subject to unlawful deductions, too? Aug 31 08:38
- Contractors, relabelling 'labour' as 'services' to appear 'fully contracted out' won't dupe IR35 inspectors Aug 31 08:30
- How often does HMRC check tax returns? Aug 30 08:27
- Work-life balance as an IT contractor: 5 top tips from a tech recruiter Aug 30 08:20
- Autumn Statement 2023 tipped to prioritise mental health, in a boost for UK workplaces Aug 29 08:33
- Final reminder for contractors to respond to the umbrella consultation (closing today) Aug 29 08:09
- Top 5 most in demand cyber security contract roles Aug 25 08:38
- Changes to the right to request flexible working are incoming, but how will contractors be affected? Aug 24 08:25
Leave a comment: