Contreras
I agree that if you say it is a year end payment in October by putting zero in Nov to March payments in the HMRC Basic PATE software software then you pay no national insurance.
I also agree that is what the CN44 guide says i.e. the director is charged on an annual basis.
The problem I foresee is that the simplistic model that will be used from April 2011 for the PAYE RTI system where you have to do a return a month I believe my be so inflexible that it may say this is month 7 and you cannot pay the director over 7/12 of the secondary threshold or it will tell you to pay an NI contribution and some people on the RTI pilot are advising this is happening.
There is some news that RTI it is now allowing annual payments so we will see in the next tax year if the HMRC basic PAYE software will allow this!
Just because it does not agree with the CN44 rules does not mean that the HMRC software will be corrected.
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Reply to: Annual Payment and RTI Paye
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Previously on "Annual Payment and RTI Paye"
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Originally posted by drumtochty View PostThat's what I'm getting at. If you pay per month in month 7 i.e. 6th October you can pay 7/ 12th of the annual secondary threshold. I reckon any more and you pay NI that you cannot reclaim like you can tax later in the year.
For directors pay, NICs are calculated on total earnings paid.
Or put another way, NI only becomes due when the accumulated salary in that tax year exceeds the threshold.
See here for HMRC guidance note.
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Originally posted by tractor View PostYep, that was what I thought I remembered lol
I recon it's a non starter and there is no way of paying the full £7k of the secondary threshold by early October 2013 without paying NI.
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Originally posted by tractor View PostI can'r remember what it was exactly but isn't there an NI issue if you pay in one lump sum even thought it's below the annual threshold? Long time since I did PAYE but you might want to check it out?
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Originally posted by drumtochty View PostCompany year end mid October 2013.
I would like to pay both directors an annual payment of £7,696, the secondary threshold by 7 October 2013. For the 2013 2014 paye period.
So that is only 7 months into the tax year.
Before RTI was this allowed or did you need to do it in month 12 i.e. mid March.
Is there anyone on the RTI pilot and do they have any info on this
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Originally posted by Sockpuppet View PostYou can pay your directors what you like when you like. RTI just changes the way you report it to HMRC nothing else.
There's a a suggestion that if no earnings are reported for three months for a employee HMRC will assume that the employment has ended.
I'm sure that will sort itself out and/or a workaround will come up.
It's one of the "devil in the detail" issues though.
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Originally posted by drumtochty View PostCompany year end mid October 2013.
I would like to pay both directors an annual payment of £7,696, the secondary threshold by 7 October 2013. For the 2013 2014 paye period.
So that is only 7 months into the tax year.
Before RTI was this allowed or did you need to do it in month 12 i.e. mid March.
Is there anyone on the RTI pilot and do they have any info on this
Leave a comment:
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Annual Payment and RTI Paye
Company year end mid October 2013.
I would like to pay both directors an annual payment of £7,696, the secondary threshold by 7 October 2013. For the 2013 2014 paye period.
So that is only 7 months into the tax year.
Before RTI was this allowed or did you need to do it in month 12 i.e. mid March.
Is there anyone on the RTI pilot and do they have any info on thisTags: None
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