What to expect from my accountant
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Potbellypig wrote: »Jesus Christ!
Your being taken for ride OP, shop around, I pay 699 pounds a year for an accountant for a limited company for a modest turn over"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
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Good evening all.
I have received a few answers from my personal accountant.
First of all I got the monthly price wrong. I pay 126 pounds per month not £175 along with a £350 closure fee. Sorry.SnipPotbellypig wrote: »Snip
I still feel a little ripped off. :think::
Me: Was a pay role administration ever set up for my account? Of no why was it missed?
Accountant: It looks like we attempted but it never went through with HMRC, so the backdating should be fine.
Me: If I was allowed to take a full salary of 11,500 how much would my corporation tax bill be?
Accountant: The corporation tax saving would be £2185, but you would need to pay employees NI of £400.32 and employers NI of £460.37. You would get corporation tax relief of the employers NI of £87.47.
Me: What happens if HMRC don't allow to back date the PAYE scheme?
Accountant: This should be fine, but if not, it would mean that you wouldn't be able to reduce that tax bill that we have been discussing.
Me: In the summary of service it say that the fee includes self-assessment. Why do I need to pay £125?
Accountant: The reason the fee is now due, is because you weren't on the monthly service for the full period and the tax return isn't included within the closure fee.
You were a client from May 2017 to the 31st of January 2018
Me: Would I qualify for state pension credit as I didn't earn much before this contracting role? Somebody has mentioned it to be so I though I should ask.
Accountant: if we can get this salary sorted, then it won’t be a problem. If not, you can voluntarily pay a small amount of NI to get the year. Link below.
https://www.gov.uk/pay-voluntary-class-3-national-insurance
Me: What's next?
Accountant: If we are able to backdate the PAYE scheme we can file an amended set of accounts, which will help reduce the tax.
There is two things I am confused about. Is the full salary of £11,500 less beneficial for all contractors to take instead of £8124 or just me?
Would the Pension credit come from my corporation tax bill or would I have to transfer from my account into my pension pot?
Thanks All.0 -
Is the full salary of £11,500 less beneficial for all contractors to take instead of £8124 or just me?
There isn't really that much difference in reality.
If you pay the higher wage, there's the extra Ees and Ers NIC and the extra gets corporation tax relief. If you pay the lower wage, there's no NIC, higher CT, but lower tax on dividends (as some of the dividends become non taxable to use the unused personal allowance between £8124 and £11,500.). So swings and roundabouts really.
It "may" make a difference if you had other income/earnings in that same tax year using up the personal allowance, in which case, probably better to restrict the pay to £8,124 as you'd have no unused allowances to set against dividends.0 -
There isn't really that much difference in reality.
If you pay the higher wage, there's the extra Ees and Ers NIC and the extra gets corporation tax relief. If you pay the lower wage, there's no NIC, higher CT, but lower tax on dividends (as some of the dividends become non taxable to use the unused personal allowance between £8124 and £11,500.). So swings and roundabouts really.
It "may" make a difference if you had other income/earnings in that same tax year using up the personal allowance, in which case, probably better to restrict the pay to £8,124 as you'd have no unused allowances to set against dividends.
Thank you Pennywise. It's good to know that I'm not missing out any more. :T
I'm still unsure about what my accountant said about the pension scheme. Is that something I have to claim back on my self assessment?0 -
Pension. No. What needs to be done in a given tax year is:
1. Have a payroll scheme in the name of the company.
2. Put the employees - in this case you - on it by NI number.
3. Submit the salary to HMRC electronically, as per Pennywise above.
I can't comment on the backdating, in 11 years of doing this across an average of 60 employers per year I have never yet had to backdate anything into a previous tax year from scratch. Just the odd minor adjustment by what is called a Prior Year Update, maybe that's what he's referring to.Hideous Muddles from Right Charlies0 -
Good morning everyone.
I've ran into another road block that I could do with some help with.
Last time I was on here I owed HMRC just over £6000 for corporation Tax. Since then my accountant has backdated the PAYE shecme for the 17/18 tax year and has requested as repayment form the HMRC for just over £2000. This was submitted around November 2018.
Whilst this was on going I agreed to start a direct debit with HMRC for £200 per mont to clear my outatanding debt. I've been paying this £200 per month since December 2018.
Last night I called the HMRC help line to find out when I will be getting this £2000 back. I was told because the company has been struck off the register I would need to re open the company to access these funds, But more importantly as the company has been struck off the debt has been written off and I don't need to pay it. I asked if I could get this in written form but I was declined with the opperator telling me he is not allowed to emails customers.
Does this sound legitimate?0 -
To get a Court to reopen the company after it has been struck off will cost considerably more than £2,000.Good morning everyone.
I've ran into another road block that I could do with some help with.
Last time I was on here I owed HMRC just over £6000 for corporation Tax. Since then my accountant has backdated the PAYE shecme for the 17/18 tax year and has requested as repayment form the HMRC for just over £2000. This was submitted around November 2018.
Whilst this was on going I agreed to start a direct debit with HMRC for £200 per mont to clear my outatanding debt. I've been paying this £200 per month since December 2018.
Last night I called the HMRC help line to find out when I will be getting this £2000 back. I was told because the company has been struck off the register I would need to re open the company to access these funds, But more importantly as the company has been struck off the debt has been written off and I don't need to pay it. I asked if I could get this in written form but I was declined with the opperator telling me he is not allowed to emails customers.
Does this sound legitimate?0 -
Cook_County wrote: »To get a Court to reopen the company after it has been struck off will cost considerably more than £2,000.
Thank you Cook_County. Am I in the position to jist cancel the direct debit to HMRC?0 -
Murray, when you say you are owed PAYE money, is this for you personally or the company?
If the company, in the usual course of events, this amount can be paid to any account with the correct authorization. See here;
https://www.gov.uk/payroll-errors/correcting-payments-to-hmrc
However, the fact your company owed CT will be taken into account, so it might be in your case the PAYE was netted off against the CT owed.
If the company has been struck off, I guess this is relevant,
http://www.cheapaccounting.co.uk/blog/index.php/how-you-can-legally-get-away-with-not-paying-corporation-tax/
If HMRC are correct and the company has been struck off, before you cancel the direct debit, write to HMRC and ask for written confirmation they've waived the debt and there is no longer any tax left to pay. If you cancel the payments before, you could cause the HMRC debt collection service to kick in.
If the amount owed for PAYE is for you personally, I wonder if you could do a self assessment to get it back. Again, a letter explaining the problem to HMRC is probably the best option.
Have you spoken to your accountants about this and asked their advice? I know you've had problems with them, but I can't see how they can absolve themselves of all responsibility for the situation you're in. Do you know what accounting body they are a member of? If so, you could try complaining to that body.0
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