Payroll query Payroll query
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Thread: Payroll query

  1. #1

    Nervous Newbie


    Join Date
    Oct 2020
    Posts
    2

    Default Payroll query

    Hi All,

    I'm new to this forum and this is my very first post/query.

    My permanent role was made redundant a couple of months ago. I used to contract few years ago via my own Limited company which has been in dormant state for last 3 years. Last month (Sept) I started a contact for 3 months. I've installed FreeAgent as I understand a little bit of accounting, studied accountancy at university many years ago.

    Here is my query -
    I'd like to pay myself a salary of £1,000 from my company. I've set-up Payroll on FreeAgent including my previous Tax code and previous earnings as per P45.
    When I run the payroll it is showing that I should be paid tax refund based on previous earnings and as per my FreeAgent payslip I should be paid more than £2k. I understand it is personal tax overpaid for the current financial year.

    What can I change on FreeAgent software to avoid this? I don't want the PAYE refund to be processed from my company, I'd rather file tax return at the end of the year and claim the refund.

    Am I missing something on the Payroll setting?

    Could someone please help/advise?

    Thanks.

    Regards,
    PV

  2. #2

    More time posting than coding


    Join Date
    Sep 2005
    Location
    Lancashire
    Posts
    272

    Default Wk1/Mth1 basis

    A way to achieve this is tick yes to the "Week 1/Month 1 basis?" box in the tax/NIC section of the employee details screen. This means FAC will calculate tax without reference to earlier months, nor the gross/tax figures you'll have entered from the P45. It basically divides the tax free personal allowance and higher rate threshold by 12. This will then leave any over/underpayment of tax to be dealt with in your SA tax return.

  3. #3

    Should post faster


    Join Date
    Nov 2017
    Posts
    154

    Default

    Quote Originally Posted by philip@wellwoodhoyle View Post
    A way to achieve this is tick yes to the "Week 1/Month 1 basis?" box in the tax/NIC section of the employee details screen. This means FAC will calculate tax without reference to earlier months, nor the gross/tax figures you'll have entered from the P45. It basically divides the tax free personal allowance and higher rate threshold by 12. This will then leave any over/underpayment of tax to be dealt with in your SA tax return.
    Absolutely correct; my question for the OP is if you didn't know this I'd suggest that even taking into accout your previous education you probably aren't up-to-date enough with accounting rules to be doing this yourself and should get actual help (or some top-up training)

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