PAYE and P11 help

CosmicTen

Hi,

I've not long started self employment under my own Ltd company and need to make my PAYE payments and need to understand how much to pay.

I've spoken to HMRC and it made sense more or less, I'm using their basic PAYE tools package which creates the P11 form for me, they said the following;

Add up column 1f, Emp and 7 which gives the figure to pay for the month (paying monthly). That's all fine but my Column 7 has an R (Refund), he said on these occasions deduct that and you're left with what to pay.

The only issue is that when I deduct column 7 I'm left with a large minus figure, so what do I do with that?

Cheers!
Cosmic.

chrismac1

Hopefully you can use the software to access the P32 report which has just 3 columns - PAYE, NI and amount due. The amount in the third column - amount due - is what you need to pay, or refund due to you.

Note I recommend NOT using HMRC software for 3 reasons:

1. Its functionality is about the worst on the market.
2. It has no reports that are useful for the business, just for HMRC.
3. If HMRC muck it up, you are left with no record of having submitted anything, no way to defend a fine.

This is not a theoretical concept. One client was fined £400 three years ago because either she did not submit it correctly or the database messed up. I have no way of knowing which it was, so no way to appeal the fine. Had she used third party software the fine would have been wiped.

Things are going to get worse next year. Real Time Information means you really need to be on top of your game on payroll. In my view using HMRC software becomes even more high risk as you have 12 submissions to make on monthly pay, 12 times the number of opportunities to be fined for HMRC's mistakes.

There has been a little game of ping-pong over the last 6 months. At various points HMRC have committed not to fine anyone until April 2014, then backtracked. For now we are at the "no fines until 2014" stage but I expect either a backtrack or just a blatant decision to fine everyone and take the flak when the time comes.

CosmicTen

Thanks for the info, I'll see what other s/ware is about. The software doesn't have P32 Reports as far as I can see, just the P11 so pretty much none the wiser.

Any other suggestions as to the original question?

Cheers!

System

chrismac1 wrote: »

Things are going to get worse next year. Real Time Information means you really need to be on top of your game on payroll. In my view using HMRC software becomes even more high risk as you have 12 submissions to make on monthly pay, 12 times the number of opportunities to be fined for HMRC's mistakes.
.

I pay 18 staff using a manual system and HMRC Tools, and it has worked well for years. But I'm not going to bother looking into new software and learning new tricks after April, I'm handing all the responsibility over to our auditors who will run the new payroll for £900 pa.

When the first year of compulsory on-line end of year returns came in, the HMRC computer locked up and wouldn't let me make the submission. They agreed it was their system fault, but I was still fined. It took months of appeals to get the fine refunded.
Funnily I still got the bonus for on-line submission. "Submission" and "Acceptance" were handled by different bits of HMRC, and one bit was fining me at the same time as another paying a bonus.

nomunnofun

CosmicTen wrote: »

Thanks for the info, I'll see what other s/ware is about. The software doesn't have P32 Reports as far as I can see, just the P11 so pretty much none the wiser.

Any other suggestions as to the original question?

Cheers!

Long time since I have seen a P11 but -

As it appears that you 'owe' a minus figure, simply send off a NIL remittance for the month - this is important! HMRC must have a record of this or you will be deemed to be late with your payments.

Carry forward the total to the following month i.e. deduct from the amount due then.

CosmicTen

Thanks Nomunnofun, I had a feeling it was just a case of a nil submission but wasn't sure.

I'm already using the real time system, thought I may as well start now.

Cheers everyone. Much appreciated.