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Permie earnings at start of year - too much tax

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    Permie earnings at start of year - too much tax

    Now before anyone flames me I've been looking into this but HMRC website is a little unclear.

    OK. I had a permie job at the start of the year, got a large taxable PILON payment and I paid a shedload of tax.

    Now I'm contracting accountant has advised me no point paying salary cos I've already used my allowances. Fair does.

    Now assuming I'll only get dividends this year now and wont go into 40%, this leaves me about £2K too much tax paid.

    Form P50 seems to be a tax reclaim form but seems more like for people who are unemployed for more than 4 weeks, retire, go back to study. Whether company directors who aint going to pay themselves a salary count - who knows?

    Obviously, when personal tax return for year end April 2012 gets done it'll all come out but money in my pocket is better than money in HMRCs pocket....

    Will speak to HMRC monday but wondered if anyone had ever done this?
    Rhyddid i lofnod psychocandy!!!!

    #2
    Make yourself a PAYE employee of your company.

    Put your already paid tax into the data tables as a director and pay yourself £0.01 for the month. This will cause a big tax refund through PAYE.

    Comment


      #3
      Originally posted by Sockpuppet View Post
      Make yourself a PAYE employee of your company.

      Put your already paid tax into the data tables as a director and pay yourself £0.01 for the month. This will cause a big tax refund through PAYE.
      Ah. I see. Yep, just registered for PAYE anway. Sounds good - thanks. Will speak to my accountant about this.
      Rhyddid i lofnod psychocandy!!!!

      Comment


        #4
        Originally posted by Sockpuppet View Post
        Make yourself a PAYE employee of your company.

        Put your already paid tax into the data tables as a director and pay yourself £0.01 for the month. This will cause a big tax refund through PAYE.
        Does that get the money back from HMRC, or just mean that YourCo refunds the tax to you personally and HMRC still sort it out at year end?

        I had the same thing when I started. I rushed through the self assessment in April and got the money back in June.
        Will work inside IR35. Or for food.

        Comment


          #5
          Originally posted by VectraMan View Post
          Does that get the money back from HMRC, or just mean that YourCo refunds the tax to you personally and HMRC still sort it out at year end?

          I had the same thing when I started. I rushed through the self assessment in April and got the money back in June.
          How could the company refund the money to you? This would be pointless I guess......
          Rhyddid i lofnod psychocandy!!!!

          Comment


            #6
            The two main options that have been discussed here are;
            (1) Put through the personal tax return after April 2012, and claim the tax refund then;
            (2) Collect the PAYE overpayment through your company payroll;

            In both cases you will not actually GET any money from the HMRC until after April 2012 (for (1) after you have filed your personal tax return, or for (2) after your company has filed its end of year PAYE return), and in my experience the personal tax refunds come through quicker than the credits on a company PAYE account.
            2012 CUK Reader Awards - '...Capital City Accountancy, all of whom were outside the top three yet still won compliments from CUK readers for their services' - well, its not an award, but we'll take it! - Best Accountant (for IT contractors) category
            2011 CUK Reader Awards - Top 3 - Best Accountant (for IT contractors) category
            || Check us out at: http://www.linkedin.com/company/capi...ccountancy-ltd

            Comment


              #7
              I was in a very similar boat, having worked through an umbrella for part of the year before starting myco. I followed the advice on this page: HM Revenue & Customs: Claim funding for a tax refund for your employees and completed the form here: https://online.hmrc.gov.uk/shortform...ww.hmrc.gov.uk.

              A week later I had a phone call from the AO, because I was out by a few pence in my calculation; I resubmitted and about two weeks later I received a cheque. In my next payslip I received the refund, and at my PAYE year end everything balanced. :-)

              Comment


                #8
                Originally posted by matzie View Post
                I was in a very similar boat, having worked through an umbrella for part of the year before starting myco. I followed the advice on this page: HM Revenue & Customs: Claim funding for a tax refund for your employees and completed the form here: https://online.hmrc.gov.uk/shortform...ww.hmrc.gov.uk.

                A week later I had a phone call from the AO, because I was out by a few pence in my calculation; I resubmitted and about two weeks later I received a cheque. In my next payslip I received the refund, and at my PAYE year end everything balanced. :-)
                Sounds good. Obviously is dependent on setting yourself up with a salary from your ltd. Like someone previously said, I could pay myself 1p a month just to get things going.

                I'm assuming the cheque comes into the company as the employer which then pays the refund to the employee (you) as a PAYE payment in the form of tax refund?
                Rhyddid i lofnod psychocandy!!!!

                Comment


                  #9
                  Originally posted by psychocandy View Post
                  Sounds good. Obviously is dependent on setting yourself up with a salary from your ltd. Like someone previously said, I could pay myself 1p a month just to get things going.

                  I'm assuming the cheque comes into the company as the employer which then pays the refund to the employee (you) as a PAYE payment in the form of tax refund?
                  Why not just pay yourself a salary from your company? National Insurance starts again for each job you have so you don't have to worry about that costing you anything. You can get salary in and just pay PAYE tax - which is the same as you'll end up paying on dividends anyway.
                  Loopy Loo

                  Comment


                    #10
                    Originally posted by lje View Post
                    Why not just pay yourself a salary from your company? National Insurance starts again for each job you have so you don't have to worry about that costing you anything. You can get salary in and just pay PAYE tax - which is the same as you'll end up paying on dividends anyway.
                    Yeh, I understand I'll pay tax because I've used up my allowance already.

                    Is that true for NI though? Am I right in saying this is calculated on a per week/month basis rather than total for the year? (so as long as my pay per month is below the NI threshold I wont pay any).

                    Like you said, same as paying dividends tax wise but I never thought of doing this...
                    Rhyddid i lofnod psychocandy!!!!

                    Comment

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