Limited company, advice needed on Wages not salary

[topper]

hmm just spoke to the accountant, and he said he indeed did do the paperwork for the divs...I have been entering them in the online system, and he did the rest

what does it mean if you took no salary and just pure divs then?

1st as Waldorf says, get your Divi vouchers from your accountant and check then double check they all tally up to the amounts and dates you transferred the money.

2nd What it means is that last year you earned no salary, paid no NI so have no "stamp" for last year towards state pension etc, it also means you have not made best use of your income and wasted ~£7000+ tax free personal allowance meaning your accountant has suddenly cost you a lot more than just his fees by not giving you good advice!

3rd (and probably most importantly).................sack your accountant and get a decent one!

[Waldorf]

hmm just spoke to the accountant, and he said he indeed did do the paperwork for the divs...I have been entering them in the online system, and he did the rest

what does it mean if you took no salary and just pure divs then?

I think you should make sure you have this paperwork.

As for a template, here is one - Contractor Accountant specialists UK | Accountancy Service for contractors | Interim Managers Accountancy Services UK | Take Home Pay Calculator UK.

[roger55]

hmm just spoke to the accountant, and he said he indeed did do the paperwork for the divs...I have been entering them in the online system, and he did the rest

what does it mean if you took no salary and just pure divs then?

[roger55]

This kind of thing amazes me.

You wouldn't buy an operating theatre then go to an internet forum to ask medical questions would you?

Limited companies should come with a serious warning lol. Why don't people learn about business before buying one? Isn't it better to learn at someone elses' expense and time? It can be far, far more costly to learn it by making mistakes.

I think you exagerrate slightly...I think it is reasonable that the first year will be confusing for most. As cojak says, it can be fixed, albeit a little more expensive than it could have been. To be honest I have a lot sitting in the business bank account so don't mind paying a little extra this year for my f-ups...I will start with this legal tax avoidance next year

[tractor]

...

This kind of thing amazes me.

You wouldn't buy an operating theatre then go to an internet forum to ask medical questions would you?

Limited companies should come with a serious warning lol. Why don't people learn about business before buying one? Isn't it better to learn at someone elses' expense and time? It can be far, far more costly to learn it by making mistakes.

[cojak]

the accountant is useless mate never replies to 80% of my emails. maybe 1 every 3 months.it is a cheap service though. Im following correct structure this year, but last year was confused. Can I fill my own div vouchers? I believe I have a template somewhere

ok, just answer me this then. PAYE was not setup. So if someone pays themselves around 1000 per month, money transfer from the company to the personal account, what will become of this? how is it defined?

Paying yourself £1000pm, you owe around £200 - £220 per quarter in PAYE. And you are responsible for paying it once your accountant has set it up for you. So you have a bit of a backlog to pay.

But at least your accountant is cheap (otherwise he might have set you up for PAYE, given you a dividend voucher template, etc).

(Take a look at the guides on the right for the answers to your questions).

[roger55]

Wages differ in that they are rate based (i.e £10ph) salaries are annual based so irrelevant of the hours worked you get paid the same, neither are performance related! That would be a bonus!

As for the rest of the post, I know I am new but it doesn't make much sense to me, you can't pay a wage\salary and then suddenly retrospectively declare a divi of the same amount, what have you been doing for PAYE\NI? Has your accountant no filled any PAYE accounts yet?

There is no harm in changing the dates, or even amounts, but it still has to be done through the PAYE process to make use of your personal allowance, and also get your NI stamp!

Also "Employee Expenses" do not equal "Directors Salary", they are either allowable tax relief expenses with valid receipts etc, or it's a wage\salary (which granted still lowers you CT bill).

What has your accountant said??!?!

the accountant is useless mate never replies to 80% of my emails. maybe 1 every 3 months.it is a cheap service though. Im following correct structure this year, but last year was confused. Can I fill my own div vouchers? I believe I have a template somewhere

ok, just answer me this then. PAYE was not setup. So if someone pays themselves around 1000 per month, money transfer from the company to the personal account, what will become of this? how is it defined?

[Gonzo]

Cheers, maybe it's just my OCD but I read everything I could get my hands on to understand how my business will work, I will not solely rely on my Accountant!

Well done for that.

There are not many newbies on here that take the same approach. We should have you stuffed!

[topper]

Good post Topper.

Cheers, maybe it's just my OCD but I read everything I could get my hands on to understand how my business will work, I will not solely rely on my Accountant!

[cojak]

Good post Topper.

[topper]

Wages differ in that they are rate based (i.e £10ph) salaries are annual based so irrelevant of the hours worked you get paid the same, neither are performance related! That would be a bonus!

As for the rest of the post, I know I am new but it doesn't make much sense to me, you can't pay a wage\salary and then suddenly retrospectively declare a divi of the same amount, what have you been doing for PAYE\NI? Has your accountant no filled any PAYE accounts yet?

There is no harm in changing the dates, or even amounts, but it still has to be done through the PAYE process to make use of your personal allowance, and also get your NI stamp!

Also "Employee Expenses" do not equal "Directors Salary", they are either allowable tax relief expenses with valid receipts etc, or it's a wage\salary (which granted still lowers you CT bill).

What has your accountant said??!?!

[roger55]

If I understand correct, wages differ from salary in the manner that they are performance based and can vary in amount and date.

My accountant advised me to take a directors salary of something like 580 per month, however due to issues such as, number of contracts per month, client payment problems and other circumstances, the personal money I paid myself has been varied in amount and date, albeit generally towards the end of the month, 27 28 29 etc)..I believe there has also been 1 or 2 months where I paid myself nothing

should I declare everything I took for me personally, as dividends?

is there anyway I can still claim these amounts as employee expenses (directors salary), or will that be impossible as they are not regular.

seriously need some advice here on what to do, thanks