TAX/NI paid from wrong account

[Slumdog]

As a relative newbie in the contracting field i have just put 2 + 2 together and realised the mistake I have made.

After paying myself a salary from my business account to my personal account I have then paid my personal TAX/NI also from the business account.

So, taking a monthly salary and then adding on top the tax/NI that I have also paid from my business account.

I think what i have done is wrong and if it is so, how do I go about amending it?

[Craig@Clarity]

I have then paid my personal TAX/NI also from the business account.

Who have you paid this too? HMRC or yourself? If it was to HMRC, it is correct. You pay yourself the net wage from the business account to your personal account and the associated tax and NI to HMRC from your business account.

[escapeUK]

As a relative newbie in the contracting field i have just put 2 + 2 together and realised the mistake I have made.

After paying myself a salary from my business account to my personal account I have then paid my personal TAX/NI also from the business account.

So, taking a monthly salary and then adding on top the tax/NI that I have also paid from my business account.

I think what i have done is wrong and if it is so, how do I go about amending it?

The funny thing is, the mistake is actually paying yourself a salary that makes you liable to personal tax and NI. Someone has to pay for the governments wastage I guess, its just not me. Assuming you arent caught by IR35 of course?

[Slumdog]

Who have you paid this too? HMRC or yourself? If it was to HMRC, it is correct. You pay yourself the net wage from the business account to your personal account and the associated tax and NI to HMRC from your business account.

OK, so I may be correct then. So for example I have taken a salary of say £1000 for that month and lets say the personal tax/NI liability is £200. So what I have done is pay £1000 from business to personal account. Then after that I have paid £200 from business (not personal) account to HMRC for the Tax/NI.

Should it be pay £1000 from business account to personal account, and then pay £200 from the personal account to HMRC for the Tax/NI liability.

[VectraMan]

Should it be pay £1000 from business account to personal account, and then pay £200 from the personal account to HMRC for the Tax/NI liability.

You should have paid £800 to your personal account, and £200 from your business account to HMRC.

I suggest you pay yourself £200 less (i.e. £600) next month. As it stands you've not paid enough tax for the money you've earned, but as long as it works out by April it doesn't matter about individual months.

[Bunk]

OK, so I may be correct then. So for example I have taken a salary of say £1000 for that month and lets say the personal tax/NI liability is £200. So what I have done is pay £1000 from business to personal account. Then after that I have paid £200 from business (not personal) account to HMRC for the Tax/NI.

Should it be pay £1000 from business account to personal account, and then pay £200 from the personal account to HMRC for the Tax/NI liability.

I would pay £800 from the business account to personal account, and £200 to HMRC from the business account. In your case I would just correct it the next month by paying yourself £200 less (ie. £600). The end result is that you've got £1600 and HMRC have £400, everyone's happy.

Edit: Doh! Too slow

But I agree with VectraMan

[Slumdog]

Many thanks for the responses. Looks like I may have to go way back(perhaps even upto 12 months) to see when I made this blunder and fix it from there on.

Any simple tips on how to fix this.

[Bunk]

Many thanks for the responses. Looks like I may have to go way back(perhaps even upto 12 months) to see when I made this blunder and fix it from there on.

Any simple tips on how to fix this.

Well, if it goes into different tax years I'm not sure what you need to do. But I think the easiest way to correct it would be to pay a lump of tax next month to make sure that the tax matches the salary paid so far. Another way to do it would be to pay yourself a reduced salary, or even no salary, but still pay the tax for a few months so that again, the salary paid and tax paid match up.

[Platypus]

Any simple tips on how to fix this.

Ask your accountant.

No I'm not being flippant. You should have one, do use him (or her).

[richy]

Many thanks for the responses. Looks like I may have to go way back(perhaps even upto 12 months) to see when I made this blunder and fix it from there on.

Any simple tips on how to fix this.

If i make a payment in error to personal account from ltd co, i just pay it back the other way, and mark it "payment made in error, returned on xxx Jan" etc