clarification over directors paye

phr

hi all,

looking for some advice, having recently set up a ltd company with a friend of mine, we are looking for advice on the paye aspect.

the business has work but very few and far between at the moment so we haven't paid ourselves as yet, but have decided on the recommended £155pw, we are all registered with hmrc for this and have setup payroo for paye and rti, what we would like to know is seeing as the business is not finacially capable of paying how do we show this in payroo and how do we show this within our accounting software (waveapps) i presume some kind of directors account, secondly can only one director actually be paid and the other just be owed at the end of the tax year?

a lot to take in i know.

many thanks
scott

Aquamania

Two options.

1. Don't pay yourself anything this month (or future months your company cannot afford to pay you)
Not sure how you do this in payroo, but essentially it means your pay for this month will be £0.00. You'll need to file an EPS rather than an FPS;payroo may not do this automatically, so you may need to do it manually.

2. As far as payroo (and so HMRC) is concerned, pay the declared salary.
Counter that simultaneously with a loan to the company equal to the pay you expect to receive.

At £155pw, I guess there is no tax or NI to pay, but if there is, then lend the company this money too so that can be paid.

At least that is how to do the company books. HMRC don't actually care where (which bank account) they get their money from, so you could simply pay anything owed from your personal account.

Hope that explains things
If not, please ask again

phr

Quick reply many thanks.

i prefer option 2, so use payroo as if we were paying ourselves and continue to do so on a weekly or monthly basis, with regards to the accounting software (waveapps) we show the wage as an expense, but show us then loaning the same figure back as a directors investment, then when and if we can afford a weeks/months wage we then pay the direcector his loan back?

so each loan for each director can be paid when and if the money is available.

thanks
scott

phr

sorry meant to say yes no ni or tax

scott