Ltd company UC issues

dunstonh

It was the lower amount for March (£719) and changed for April onwards to £732 according to my accountant?

So that is one error and one potential issue.

Error: Furlough pay is based on March 2020.  So, it should be 80% of £719 = £575.20

Potential issue:  (for when you come off furlough) Directors normally take their salary to the primary threshold (if no employees) or secondary threshold (if there are employees in addition to the directors and the employment allowance is used up by the employees).    In recent years, the primary threshold and secondary threshold have been the same figure.  Last year it was £719 for both. So, it didnt matter.   However, this year, they are different figures.   Your account is using the secondary threshold.        Apart from you, is there any other employees on the payroll?  If not, then your accountant is using the wrong threshold. 

Grumpy_chap

For the OP, surely they need to look at what the payslip says that was prepared by the Accountant.  If that has been prepared at £732, then that is what the OP will be deemed to have earned (paid by the Ltd Co.)

The Ltd Co. has been paid CJRS claim of £586, but still "topped up" the payment to the OP to £732.

If, as the OP says, there are no funds in the business to cover the "top up" amount of £146, that does not affect the amount as being paid to the OP.  It is simply that the payment will be split:

• £586 from the business bank account paid to the OP (with the business bank account receiving the £586 from the CJRS grant)
• zero balance left in the business bank account
• £146 paid to the OP as the Director's Loan Account

So, that was May.  For the sake of illustration, let's assume that the OP's Ltd Co. generates income (revenue) in June of £1,000 and with no other business expenses incurred.  At the end of June, payroll will be run for £732, but the OP's Ltd Co. can pay the OP as follows:

• £732 salary from the business bank account
• PLUS £146 from the Director's Loan account
• Total paid to the OP £878
• £122 left as the balance in the Ltd Co. bank account

Depending upon details, the Ltd Co. may be able to claim part of June as furlough - this payment will then be added to the Ltd Co. bank account and stay as balance.

It makes sense that the Accountant processed pay-roll at £732 to make best use of the threshold and tax-efficiency.
It also makes sense that UC assessed the payment on the basis of the £732 as per the pay-slip as, at some future month, the £146 that will transfer from the Director's Loan account will not be income at that point (it is a loan repayment then).

neilmcl

Trogdor_2002 said:

calcotti said:

I don't really understand what your first post is saying in respect of what your payslip shows. If you have reported to HMRC through PAYE that you were paid £732 then that is the figure UC will use.

If you only intended to pay yourself the £586.50 you would get from CJRS then your payslip should show that amount as the salary for the month. 

It seems it’s been a mistake by my accountants secretary, she hasn’t stated I was only receiving the furloughed amount and not topping up to the 100%.

Trying to get it rectified now!

Did you make that clear to your accountant in the first place?

Trogdor_2002

neilmcl said:

Trogdor_2002 said:

calcotti said:

I don't really understand what your first post is saying in respect of what your payslip shows. If you have reported to HMRC through PAYE that you were paid £732 then that is the figure UC will use.

If you only intended to pay yourself the £586.50 you would get from CJRS then your payslip should show that amount as the salary for the month. 

It seems it’s been a mistake by my accountants secretary, she hasn’t stated I was only receiving the furloughed amount and not topping up to the 100%.

Trying to get it rectified now!

Did you make that clear to your accountant in the first place?

Well, technically.
he has been unavailable during all of this so I dealt with his secretary for the furlough and made it very clear it would be the 80% without a top up to 100% from the business.

spoke with him earlier to get it rectified so just waiting on that now.

dunstonh

For the OP, surely they need to look at what the payslip says that was prepared by the Accountant.  If that has been prepared at £732, then that is what the OP will be deemed to have earned (paid by the Ltd Co.)

The Ltd Co. has been paid CJRS claim of £586, but still "topped up" the payment to the OP to £732.

The OP is not entitled to £586 as this claim exceeds 80%.

Grumpy_chap

I took those numbers from OP.

732 * 0.8 = 586.