Can I pay myself the next 3 months salary in advance?

[Nixon Williams]

Basically, I've got myself into a bit of a pickle and my personal account is running dry now. I have my annual salary at £12,000 and due to lack of business have not taken one for the last 4 months. Now that I have a short term contract, instead of paying myself for the last 4 months (I've already declared zero income for this period because I was chased up for PAYE), can I simply elect to pay the next 3 months to myself in advance?

You could pay yourself a salary for the 'missing' 4 months at £589 pcm, as this is below the PAYE & NIC thresholds, then no tax or NIC will be due, so your declaration can stand.

You can therefore make a payment of £2,356 (£589 x 4) with no worries regarding loans or making an incorrect declaration.

Alan

[northernladuk]

so do I...and although they are supposedly not legal, there are no fines associated..you can charge urself interest to get out of sticky situations

I don't think you are doing the same as MF or even the correct way. There is no interest required on directors loans and they are perfectly legal. Paying some interest also does not get you out of a sticky situation either.

[John Crowe]

I regularly use 'directors loans' for cash flow elsewhere(include > 5k for a short while). There is of course the adage that 'if it all balances out at the end of the year' then it's all OK as well but a proportion of accountants/posters on CUK will deny this (in case you ever get auditted )

so do I...and although they are supposedly not legal, there are no fines associated..you can charge urself interest to get out of sticky situations

[MarillionFan]

You can, but it will be seen as a loan to you. Go careful if it takes your total loan value over £5,000 as it will become a benefit in kind.

You could increase your salary for the current month instead, although it will mean more tax.

I regularly use 'directors loans' for cash flow elsewhere(include > 5k for a short while). There is of course the adage that 'if it all balances out at the end of the year' then it's all OK as well but a proportion of accountants/posters on CUK will deny this (in case you ever get auditted )

[NadJ]

Helpful as ever. It will be below £5,000 in total so that's brill!

Thanks Clare

[Clare@InTouch]

You can, but it will be seen as a loan to you. Go careful if it takes your total loan value over £5,000 as it will become a benefit in kind.

You could increase your salary for the current month instead, although it will mean more tax.

[NadJ]

Basically, I've got myself into a bit of a pickle and my personal account is running dry now. I have my annual salary at £12,000 and due to lack of business have not taken one for the last 4 months. Now that I have a short term contract, instead of paying myself for the last 4 months (I've already declared zero income for this period because I was chased up for PAYE), can I simply elect to pay the next 3 months to myself in advance?