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  • FIRST POST
    • MarkOnline
    • By MarkOnline 13th Mar 19, 3:27 PM
    • 19Posts
    • 0Thanks
    MarkOnline
    What PAYE Amount Should I Use From April 2019?
    • #1
    • 13th Mar 19, 3:27 PM
    What PAYE Amount Should I Use From April 2019? 13th Mar 19 at 3:27 PM
    Hey guys, and let me say thank you upfront for any advice you can give.

    For this past year (18/19) I was inputting £702/month as my employee earnings as this was the maximum amount to use without having to pay tax - and also using tax code 1185L. I think this is called Optimum Director’s salary or Primary Threshold for NI.

    * And just to clarify, this is to avoid both income tax and employee NI contributions (not just income tax). *

    So I'm just wondering from April 2019 what would the new amount be? To avoid income tax and employee NI (the rest of my income being issued as dividends).

    Also, I'm sure I'll have to change my tax code change from 1185L? Am I right in thinking it’s 1250L this year? (add 65 to 1185L). I will need to input the new code in the Basic PAYE Tools program I use.

    Pardon my ignorance on this and thanks for any help.!

    Mark
Page 1
    • agrinnall
    • By agrinnall 13th Mar 19, 4:49 PM
    • 22,124 Posts
    • 18,097 Thanks
    agrinnall
    • #2
    • 13th Mar 19, 4:49 PM
    • #2
    • 13th Mar 19, 4:49 PM
    All the information you need to arrive at the answers to your questions is available here.


    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020#paye-tax-and-class-1-national-insurance-contributions
    • Dazed and confused
    • By Dazed and confused 13th Mar 19, 7:48 PM
    • 4,218 Posts
    • 2,176 Thanks
    Dazed and confused
    • #3
    • 13th Mar 19, 7:48 PM
    • #3
    • 13th Mar 19, 7:48 PM
    Every thread you have posted pretty much asks the same questions year on year.

    Have you ever wondered why you, as the employer, arent receiving the tax code information for you, as the employee, from HMRC?

    You should be getting a document called P9X which explains how an L tax code should be increased (where no separate notification is received).

    Have you checked your Personal Tax Account to see that your state pension entitlement is increasing each year as I presume you expect?

    Something doesn't seem right somewhere and I wonder if you are in for a nasty surprise somewhere along the line?
    • silvercar
    • By silvercar 14th Mar 19, 8:33 AM
    • 38,767 Posts
    • 162,052 Thanks
    silvercar
    • #4
    • 14th Mar 19, 8:33 AM
    • #4
    • 14th Mar 19, 8:33 AM
    For this past year (18/19) I was inputting £702/month as my employee earnings as this was the maximum amount to use without having to pay tax - and also using tax code 1185L. I think this is called Optimum Director’s salary or Primary Threshold for NI.
    £719.33 for 2019/20 to give £8632 for the year.

    (£702 for 2018/19 gave £8424 for the year.)
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 14th Mar 19, 10:08 AM
    • 3,395 Posts
    • 2,005 Thanks
    TheCyclingProgrammer
    • #5
    • 14th Mar 19, 10:08 AM
    • #5
    • 14th Mar 19, 10:08 AM
    My accountant has recommended £715 for the new tax year.
    • MarkOnline
    • By MarkOnline 14th Mar 19, 10:30 AM
    • 19 Posts
    • 0 Thanks
    MarkOnline
    • #6
    • 14th Mar 19, 10:30 AM
    • #6
    • 14th Mar 19, 10:30 AM
    My accountant has recommended £715 for the new tax year.
    Originally posted by TheCyclingProgrammer
    I was told £715 yesterday by someone also. Did your accountant clarify that this amount was enoughso that it counts as a years ‘stamp’ for your national insurance history to help protect your future entitlement to state pension?

    Many thanks
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 14th Mar 19, 12:18 PM
    • 3,395 Posts
    • 2,005 Thanks
    TheCyclingProgrammer
    • #7
    • 14th Mar 19, 12:18 PM
    • #7
    • 14th Mar 19, 12:18 PM
    I was told £715 yesterday by someone also. Did your accountant clarify that this amount was enoughso that it counts as a years ‘stamp’ for your national insurance history to help protect your future entitlement to state pension?

    Many thanks
    Originally posted by MarkOnline
    Yes, it's well above the LEL.
    • agrinnall
    • By agrinnall 14th Mar 19, 2:17 PM
    • 22,124 Posts
    • 18,097 Thanks
    agrinnall
    • #8
    • 14th Mar 19, 2:17 PM
    • #8
    • 14th Mar 19, 2:17 PM
    Did your accountant clarify that this amount was enoughso that it counts as a years ‘stamp’ for your national insurance history to help protect your future entitlement to state pension?
    Originally posted by MarkOnline

    You definitely don't need to ask that question as it's a simple look up in the link that I posted previously.
    • Dazed and confused
    • By Dazed and confused 14th Mar 19, 10:45 PM
    • 4,218 Posts
    • 2,176 Thanks
    Dazed and confused
    • #9
    • 14th Mar 19, 10:45 PM
    • #9
    • 14th Mar 19, 10:45 PM
    I wonder if the op is actually using Basic PAYE Tools to send the payroll information to HMRC or not bothering as there's no tax or National Insurance to pay?
    • p00hsticks
    • By p00hsticks 14th Mar 19, 11:08 PM
    • 6,780 Posts
    • 7,414 Thanks
    p00hsticks
    I was told £715 yesterday by someone also. Did your accountant clarify that this amount was enoughso that it counts as a years ‘stamp’ for your national insurance history to help protect your future entitlement to state pension?

    Many thanks
    Originally posted by MarkOnline

    Have you checked your NI record to ensure it is getting updated ?
    • silvercar
    • By silvercar 15th Mar 19, 7:49 AM
    • 38,767 Posts
    • 162,052 Thanks
    silvercar
    All the information you need to arrive at the answers to your questions is available here.


    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2019-to-2020#paye-tax-and-class-1-national-insurance-contributions
    Originally posted by agrinnall
    That link gives £719 for the primary and secondary threshold, so why are some suggesting £715?
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 15th Mar 19, 9:35 AM
    • 3,395 Posts
    • 2,005 Thanks
    TheCyclingProgrammer
    That link gives £719 for the primary and secondary threshold, so why are some suggesting £715?
    Originally posted by silvercar
    My accountants reasoning is that it’s just a nice round amount close to the threshold. £719 would work too if the extra £9 corporation tax saving matters.
    • jimmo
    • By jimmo 15th Mar 19, 8:17 PM
    • 2,031 Posts
    • 2,454 Thanks
    jimmo
    Those of you advocating £715/ £719 may be interested that some think differently. Looks like they may have a point.
    https://jf-financial.co.uk/2019/01/11/optimum-salary-and-dividends-2019-20-limited-company-directors/
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 15th Mar 19, 11:22 PM
    • 3,395 Posts
    • 2,005 Thanks
    TheCyclingProgrammer
    Those of you advocating £715/ £719 may be interested that some think differently. Looks like they may have a point.
    https://jf-financial.co.uk/2019/01/11/optimum-salary-and-dividends-2019-20-limited-company-directors/
    Originally posted by jimmo
    JF Financial ARE my accountants. And they recommend £715/month. As does that article *unless* you believe you’re eligible for the employer’s NIC allowance.
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