Reply to: Director / Employee Awards

[northernladuk]

Considering my joke of a course (according to NorthernGrump) got a rate rise of £100/day & I can give myself a tax free bonus I think I am!

Clearly its been a learning curve on the accounts but hey what business does'nt make mistakes - so long as they are corrected - I have nothing to hide!

There are mistakes and there is not showing a responsibility of care to your accounts. Ignorance and 'oops it was a mistake' are not defenses in investigations or court. You, and you alone are legally responsible for your finances even if you do have an accountant... That 'Ooops' can end up costing your house and company in the worst case. An expensive tax bill and fine in most normal cases. HMRC inspectors are NOT nice people.

You have totally the wrong view of HMRC. You talk about what you think you deserve. It doesn't work like that. You have to understand HMRC and their rules. It matter squat what you think. Even common sense doesn't work with HMRC let alone this load of pap.

I am serious when I say to you get an accountant. You cannot run a company on free advice when you clearly don't know what you are doing. It will cost you a lot more than you can pay in the long run...

As Malvolio quite rightly points out... A good accountant will pay for themselves many times over when starting out.

You are thrashing a dead horse with this one and you need to drop it and move on. That accountant may however be able to show you many other ways you can legitimately save tax to the same amounts you are talking and more.

Just for clarity as well.. I didn't say the course you did was a joke, the fact you think a couple of grand tax free is a measured reward for passing a C&G is.

[SueEllen]

Considering my joke of a course (according to NorthernGrump) got a rate rise of £100/day & I can give myself a tax free bonus I think I am!

And?

Part and parcel of the working world today is continuous re-skilling whether that's by taking courses or reading books.

The only friends and family of mine who don't have to re-skill are retired, have dementia or dead, and even the retired ones don't sit on their asses.

Clearly its been a learning curve on the accounts but hey what business does'nt make mistakes - so long as they are corrected - I have nothing to hide!

That's why an accountant, who knows what they are doing plus applicable loopholes so if HMRC start looking at your accounts a few years down the line they don't find questionable things, is useful.

[Podgy]

Nah, you don't need one. You're clearly doing fine on your own.

Considering my joke of a course (according to NorthernGrump) got a rate rise of £100/day & I can give myself a tax free bonus I think I am!

Clearly its been a learning curve on the accounts but hey what business does'nt make mistakes - so long as they are corrected - I have nothing to hide!

[Podgy]

So you've filed your 2008/09 and 2009/10 tax return already, and you want to amend them to add in salary that wasn't actually paid? You accrued £6k in the 2009/10 accounts but didn't declare it on your SATR? And your 2010/11 SATR is late?

To be frank, my only advice can be that you need to talk to an accountant. You could have a whole heap of problems with late and incorrect returns, especially given that penalties are behaviour relates these days.

Yes I want to put the 'actual' salary (rather than the accrual) for the 2009/10 (I'm now submitting amendments which I believe you can do for up to 2 years).

I did'nt declare the £6k in my satr as it was not paid (but will adjust when I do my satr in Jan as you can go back several years).

[MadDawg]

You forgot to say 'GET AN ACCOUNTANT' - yawn zzzzzzzzzz

Nah, you don't need one. You're clearly doing fine on your own.

[northernladuk]

You forgot to say 'GET AN ACCOUNTANT' - yawn zzzzzzzzzz

It is obvious you are after the answer you want to hear so I am not gonna bother repeating it twice.

[Podgy]

Looking at your questions and inability to read and understand the information given to you I am convinced it was the best advice you could possibly want.

You forgot to say 'GET AN ACCOUNTANT' - yawn zzzzzzzzzz

[speling bee]

Your childish, rude, boring and clearly ignorant! I'm only surprised you mentioned getting an accountant once - its not your normal broken boring record!

'You're childish, rude, boring and clearly ignorant.'

[northernladuk]

Your childish, rude, boring and clearly ignorant! I'm only surprised you mentioned getting an accountant once - its not your normal broken boring record!

Looking at your questions and inability to read and understand the information given to you I am convinced it was the best advice you could possibly want.

[Podgy]

So really this is all a croc of tulip and is just you avoiding tax which also fails the 'the award is reasonable and there’s no evidence that it represents disguised remuneration' clause.

If you want people to give you sympathy/pat you on the back/tell you what you want to hear go join Mumsnet. If you want advice and want to listen and understand it then post here but don't take the piss.

Avoid tax by paying a bonus for passing a C&G course? You are a disgrace.

Your childish, rude, boring and clearly ignorant! I'm only surprised you mentioned getting an accountant once - its not your normal broken boring record!

[northernladuk]

The legislation all relates to benefits in kind - there's a clear distinction between excluded employees (those earning under £8,500) and non-excluded (directors and those earning over £8,500).

Income Tax (Earnings and Pensions) Act 2003

216Provisions not applicable to lower-paid employments

(1)The Chapters of the benefits code listed in subsection (4) do not apply to an employment in relation to a tax year if—
(a)it is lower-paid employment in relation to that year (see section 217), and
(b)condition A or B is met.
(2)Condition A is that the employee is not employed as a director of a company.
(3)Condition B is that the employee is employed as a director of a company but has no material interest in the company and either—
(a)the employment is as a full-time working director, or
(b)the company is non-profit-making or is established for charitable purposes only.“Non-profit-making” means that the company does not carry on a trade and its functions do not consist wholly or mainly in the holding of investments or other property.

That is more or less what I said... but with a slightly different approach

[Clare@InTouch]

I'm a director in lower paid employment? there is no comma after 'director' so thats how I'm reading it?

The legislation all relates to benefits in kind - there's a clear distinction between excluded employees (those earning under £8,500) and non-excluded (directors and those earning over £8,500).

Income Tax (Earnings and Pensions) Act 2003

216Provisions not applicable to lower-paid employments

(1)The Chapters of the benefits code listed in subsection (4) do not apply to an employment in relation to a tax year if—
(a)it is lower-paid employment in relation to that year (see section 217), and
(b)condition A or B is met.
(2)Condition A is that the employee is not employed as a director of a company.
(3)Condition B is that the employee is employed as a director of a company but has no material interest in the company and either—
(a)the employment is as a full-time working director, or
(b)the company is non-profit-making or is established for charitable purposes only.“Non-profit-making” means that the company does not carry on a trade and its functions do not consist wholly or mainly in the holding of investments or other property.

[northernladuk]

Web Design - Intermediate & Advanced (C&G) - distinctions

So really this is all a croc of tulip and is just you avoiding tax which also fails the 'the award is reasonable and there’s no evidence that it represents disguised remuneration' clause.

If you want people to give you sympathy/pat you on the back/tell you what you want to hear go join Mumsnet. If you want advice and want to listen and understand it then post here but don't take the piss.

Avoid tax by paying a bonus for passing a C&G course? You are a disgrace.

[Podgy]

Why do people ask for advice and then don't read and won't listen to it when it is given....

Just for a laugh, fancy telling us what they are?

Web Design - Intermediate & Advanced (C&G) - distinctions

[Podgy]

EIM01100 - Employment income: examination grants to employees

Sections 62 and 203 ITEPA 2003
Following the decision in Ball v Johnson (47TC155) examination awards paid by employers to employees for passing a recognised examination are not taxable as earnings within Section 62 ITEPA 2003 (see EIM00515) where all the following conditions are satisfied:

the award is made at the discretion of the employer (that is, the employer is under no legal obligation to make the award)
it is not part of the employee's duties to sit and pass the examination (for example, dismissal does not automatically follow failure)
the award takes the form of a lump sum paid once and for all
the award is reasonable in amount and there is no evidence to suggest that it represents disguised remuneration
the employee is in lower paid employment (see EIM20100).
For directors and employees who are not in lower paid employment the award is treated as earnings by Section 203 ITEPA 2003. If the award is in the form of cash, PAYE should be operated at the time of payment.

(This text has been withheld because of exemptions in the Freedom of Information Act 2000)

Special increments of salary granted on passing examinations are chargeable in the ordinary way.

Employment income: examination grants to employees

I'm a director in lower paid employment? there is no comma after 'director' so thats how I'm reading it?