Payroll/PAYE Query

Divorcing · 31 May 2016 at 11:16AM

Hi all

So I recently went from sole trader to Limited company and would like some help please.

I'm the only employee of the company and although my accountant is very competitive on the yearly accounts etc is asking £140+VAT per year to do the payroll, this seems a little high to me especially given there is only one employee.

I've seen cheaper online but just wanted to ask for any recommendations here please. Some I have seen are Payroo (tempting as free!), Sage One Payroll (bit pricey for single employee), Xero (again a bit pricey) etc.

Or is it simple enough to do for yourself? Noticed there is a ist of free software on the the gov.uk site - https://www.gov.uk/payroll-software/free-software

Also I know I should probably have done this previously as the company was incorporated in March and I have paid myself monthly to date. Will I suffer any penalties or can this be backdated?

Thank you for reading

spadoosh · 31 May 2016 at 11:38AM

Its not difficult to do yourself (especially with one employee).

The free software does most of the work for you. If you can enter your basic salary into a box, you shouldn't have too many issues.

Two late payments is a fine and theres RTI submissions that could get you a few letters.

Have you paid HMRC? If not, id suggest making a phone call as soon as possible. But with it only being from march you shouldnt be too far behind.

Divorcing · 31 May 2016 at 11:56AM

Thanks spadoosh, I am home now so may give them a call. As yet I haven't paid them anything, wasn't aware I should have in all honesty.

I haven't paid anything as yet but

spadoosh · 31 May 2016 at 12:02PM

It depends on your earnings, tax code and employee status whether or not they'll be owed anything.

Download one of the free softwares and put your numbers in, will soon see if anything is owed (if youve had tax deducted or NIC's then you will owe HMRC).

Divorcing · 31 May 2016 at 12:38PM

Thanks again, I just paid myself as I did before when I had Limited Company, that is a salary to reflect my tax allowance. Silly of me as things have obviously changed I know now!

Suarez · 31 May 2016 at 1:08PM

You will probably owe national insurance if your are paying up to your personal tax allowance.

HMRC have free software. 12pay in another one that I see recommended a lot and it's free up to 9 employees.

Divorcing wrote: »

Also I know I should probably have done this previously as the company was incorporated in March and I have paid myself monthly to date. Will I suffer any penalties or can this be backdated?

You can post the payments already made to the directors loan account then clear the account with the salary payments. You will need to tick the director box when setting up the payroll to make sure your national insurance is calculated annually.

Divorcing · 31 May 2016 at 2:51PM

Suarez wrote: »

You can post the payments already made to the directors loan account then clear the account with the salary payments. You will need to tick the director box when setting up the payroll to make sure your national insurance is calculated annually.

Thank you Suarez, I'm not great at this stuff in all honesty and am not too sure what you mean. I have made 3 payments from the business account to my personal account with the reference as salary.

Divorcing · 31 May 2016 at 2:53PM

Also I have enrolled again for PAYE as my activation code had expired, called HMRC and they have said that I will need to complete an 'Early year update' for the year up to 5/4/16 and then they will calculate any liability. Then I will need to make the monthly submissions once up to date.

Does this sound right and also should I do this if I am doing as you suggest Suarez?

fishybusiness · 31 May 2016 at 3:07PM

Have used 12Pay and Payroo.

12Pay is nice and easy, the only thing I don't like is that it is a download, and Windows only. Many systems are cloud based now, much less to worry about and data backup not required.

Payroo I find a little fiddly to navigate, although it does the job just fine including end of year.

This year I am using https://www.thepayrollsite.co.uk, easier to work with than Payroo, small monthly charge - quite happy with it.

Suarez · 31 May 2016 at 4:17PM

Divorcing wrote: »

Also I have enrolled again for PAYE as my activation code had expired, called HMRC and they have said that I will need to complete an 'Early year update' for the year up to 5/4/16 and then they will calculate any liability. Then I will need to make the monthly submissions once up to date.

Does this sound right and also should I do this if I am doing as you suggest Suarez?

It's up to you. If you had more than just yourself then you would have to do the method suggested by HMRC.

I wouldn't attempt to do it if your unsure on where to post things.

Your accountant could do it easily if you explain what's happened. You're basically loaning 3 months salary from the company then clearing the loan with a salary payment.

engineer_amy · 31 May 2016 at 4:44PM

Download HMRC Basic PAYE Tools - its free, very simple to use and has step by step help instructions within the package.

You need your log in details for Government Gateway (once you get your activation code), You set up the company details and employee details and each month you simply open the package, enter the payment date and gross amount, it automatically calculates Tax, NIC and net pay, and then you just submit the details to HMRC (and make a payment through your online banking by 22nd of the following month)

For the Earlier Year Update its also very simple to do through the same package. Just choose the employee (yourself), click on earlier year update, enter the payment date and gross amount and submit (applies to any payments made before 6th April 2016).

HMRC will talk you through it step by step if you need to, I have found them very helpful when I had to do an earlier year update and couldn't use our Sage package to do it.

Payroll/PAYE Query

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