Sole employee of ltd company but found out not PAYE

jimmy_f

Hello, 
I am sole employee of my company paid £8600 in salary and £5500 in dividends. This was set up by my accountant several years ago. I admit I am pretty naive about the ins and outs of this.
On contacting HMRC I have found out that I am not PAYE and no payments through RTI which came as a surprise to me.  The operator said that I would be contacted under the self employed scheme as long as I had self assessment returns from last three years.
Does anyone have experience about this please and helpful advice/knowledge is appreciated . Most people work on that basis  but judgemental, sarcastic comments  seem to be the norm from some people on this forum.
We are all trying to make ends meet in this situation and have enough on our plate without having to deal with that.
Many thanks in advance

Hermann

I suspect only your accountant can explain what has happened.

Jeremy535897

If your self assessment returns show no income from self employment, whether or not HMRC contact you won't matter. You don't meet the eligibility criteria except bullet point 1:

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID- 19

You will not qualify for the coronavirus job retention scheme either:

Employees you can claim for

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

I assume your pay was set at £8,600 as the primary threshold for NIC is £8,632.

jimmy_f

Jeremy535897 said:

If your self assessment returns show no income from self employment, whether or not HMRC contact you won't matter. You don't meet the eligibility criteria except bullet point 1:

Who can apply

You can apply if you’re a self-employed individual or a member of a partnership and you:

• have submitted your Income Tax Self Assessment tax return for the tax year 2018-19
• traded in the tax year 2019-20
• are trading when you apply, or would be except for COVID-19
• intend to continue to trade in the tax year 2020-21
• have lost trading/partnership trading profits due to COVID- 19

You will not qualify for the coronavirus job retention scheme either:

Employees you can claim for

Furloughed employees must have been on your PAYE payroll on 28 February 2020, and can be on any type of contract, including:

• full-time employees
• part-time employees
• employees on agency contracts
• employees on flexible or zero-hour contracts

The scheme also covers employees who were made redundant since 28 February 2020, if they are rehired by their employer.

I assume your pay was set at £8,600 as the primary threshold for NIC is £8,632.

Thanks for your responses, appreciated.
I am paying tax on profit as a result of my self assessment tax return ( not much but there is a payment.) It would seem that I cover all the bullet points  you list under the self employed criteria. 
If there has not been any PAYE involved in my company and no paying via RTI does that mean that I am in effect self employed ?
Thanks again

Jeremy535897

If you do have self employed income, there are other tests to meet. That was just the eligibility. Read the full details at
https://www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme
If your self employment income as reported exceeds all your other taxable income (that's your salary, dividend, rent, interest and anything else on your tax return) in either 2018/19, or on average over the period 2016/17 to 2018/19, you may be OK, but I don't know without all the details. If you still have an accountant, ask them.

Castle

jimmy_f said:

Thanks for your responses, appreciated.
I am paying tax on profit as a result of my self assessment tax return ( not much but there is a payment.) It would seem that I cover all the bullet points  you list under the self employed criteria. 
If there has not been any PAYE involved in my company and no paying via RTI does that mean that I am in effect self employed ?
Thanks again

You are probably paying a small amount of income tax on your dividend; nothing to do with "tax on profit".

Your salary should be entered on your self assessment returns; even if it's below the PAYE/NIC's limit.

As already mentioned, speak to your accountant.