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  • FIRST POST
    • MarkOnline
    • By MarkOnline 12th Mar 18, 12:36 PM
    • 17Posts
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    MarkOnline
    What PAYE Amount Should I Use From April 2018?
    • #1
    • 12th Mar 18, 12:36 PM
    What PAYE Amount Should I Use From April 2018? 12th Mar 18 at 12:36 PM
    Hey guys, and let me say thank you upfront for any advice you can give.

    I incorporated in 2011. I used to have my accountant do pretty much everything.
    I am the sole employee and MD.

    These days I am paying him less for a smaller service, and taking care of my own PAYE.

    For this past year (17/18) I was inputting 679/month as my employee earnings as this was the maximum amount to use without having to pay tax - and also using tax code 1150L.

    * 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 2018 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 1150L? I will need to input the new code in the Basic PAYE Tools program I use on my computer and HMRC never tell me what new code to use each year. Can someone tell me what code to use?

    Pardon my ignorance on this and thanks for any help.

    Mark
Page 1
    • Dazed and confused
    • By Dazed and confused 12th Mar 18, 12:52 PM
    • 2,557 Posts
    • 1,226 Thanks
    Dazed and confused
    • #2
    • 12th Mar 18, 12:52 PM
    • #2
    • 12th Mar 18, 12:52 PM
    If HMRC dont supply you (as the employer) with a new tax code for you (the employee) then you should use the information in form P9X which HMRC should send you (as the employer).
    • ceh209
    • By ceh209 12th Mar 18, 1:16 PM
    • 756 Posts
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    ceh209
    • #3
    • 12th Mar 18, 1:16 PM
    • #3
    • 12th Mar 18, 1:16 PM
    Try HMRC's website:

    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2017-to-2018

    https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2018-to-2019
    Excuse any mis-spelt replies, there's probably a cat sat on the keyboard
    • silvercar
    • By silvercar 12th Mar 18, 2:02 PM
    • 37,218 Posts
    • 156,807 Thanks
    silvercar
    • #4
    • 12th Mar 18, 2:02 PM
    • #4
    • 12th Mar 18, 2:02 PM
    You want the primary threshold for NI. This year it is 680, next year it is 702.

    I don't know if there was a specific reason why you were at 679 rather than 680 and if this 1 difference indicates some other force in play.
    • MarkOnline
    • By MarkOnline 12th Mar 18, 2:12 PM
    • 17 Posts
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    MarkOnline
    • #5
    • 12th Mar 18, 2:12 PM
    • #5
    • 12th Mar 18, 2:12 PM
    @SilverCar Yeah I had been advised last year, "For the year 2017/17, you can pay yourself 157 (679 per month), without there being any deductions required."

    But 702 is what I needed to know Many thanks
    • MarkOnline
    • By MarkOnline 12th Mar 18, 2:14 PM
    • 17 Posts
    • 0 Thanks
    MarkOnline
    • #6
    • 12th Mar 18, 2:14 PM
    • #6
    • 12th Mar 18, 2:14 PM
    If HMRC dont supply you (as the employer) with a new tax code for you (the employee) then you should use the information in form P9X which HMRC should send you (as the employer).
    Originally posted by Dazed and confused
    I actually never received anything from them regarding the new code. It's always me asking people just like I'm doing now. All I know is that I'm using 1150L this year.
    • MarkOnline
    • By MarkOnline 12th Mar 18, 2:31 PM
    • 17 Posts
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    MarkOnline
    • #7
    • 12th Mar 18, 2:31 PM
    • #7
    • 12th Mar 18, 2:31 PM
    I think 1185L for this year's code? (add 35 to 1150L) Can anyone confirm? Thanks
    • Dazed and confused
    • By Dazed and confused 12th Mar 18, 2:31 PM
    • 2,557 Posts
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    Dazed and confused
    • #8
    • 12th Mar 18, 2:31 PM
    • #8
    • 12th Mar 18, 2:31 PM
    "You" most likely wouldn't have received anything if your tax code was the basic "emergency" code number most people have.

    But your employer should have received a P9X. Not sure if this is sent via email or snail mail these days but they should have received one. This is the form which tells your employer how to upgrade certain tax codes at the changeover from one tax year to the next (where an individual coding notice hasn't been sent).

    https://www.gov.uk/government/publications/p9x-tax-codes
    Last edited by Dazed and confused; 12-03-2018 at 2:33 PM.
    • silvercar
    • By silvercar 12th Mar 18, 5:20 PM
    • 37,218 Posts
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    silvercar
    • #9
    • 12th Mar 18, 5:20 PM
    • #9
    • 12th Mar 18, 5:20 PM
    @SilverCar Yeah I had been advised last year, "For the year 2017/17, you can pay yourself 157 (679 per month), without there being any deductions required."

    But 702 is what I needed to know Many thanks
    Originally posted by MarkOnline
    The google phrase is optimum directors salary 2018/19.

    Still slightly puzzled why you were told 679 not 680.

    There is the opportunity to utilise the NI Employment Allowance, but you can't use it if your are the only employee.
    • MarkOnline
    • By MarkOnline 12th Mar 18, 6:56 PM
    • 17 Posts
    • 0 Thanks
    MarkOnline
    The google phrase is optimum directors salary 2018/19.

    Still slightly puzzled why you were told 679 not 680.

    There is the opportunity to utilise the NI Employment Allowance, but you can't use it if your are the only employee.
    Originally posted by silvercar
    Yes mate, I'm the sole employee. Thanks.
    • Dazed and confused
    • By Dazed and confused 12th Mar 18, 7:20 PM
    • 2,557 Posts
    • 1,226 Thanks
    Dazed and confused
    It would be interesting if the op could check their National Insurance details and State Pension entitlement on their Personal Tax Account in a couple of months, will be interesting to know if 2017:18 is shown as a qualifying year?
    • atilla
    • By atilla 25th Mar 18, 12:44 PM
    • 834 Posts
    • 708 Thanks
    atilla
    It would be interesting if the op could check their National Insurance details and State Pension entitlement on their Personal Tax Account in a couple of months, will be interesting to know if 2017:18 is shown as a qualifying year?
    Originally posted by Dazed and confused
    Why wouldn't it?
    • Dazed and confused
    • By Dazed and confused 25th Mar 18, 3:10 PM
    • 2,557 Posts
    • 1,226 Thanks
    Dazed and confused
    Because the op is being paid 679/month.

    https://jf-financial.co.uk/2017/01/12/optimum-directors-salary-dividends-201718/
    • silvercar
    • By silvercar 25th Mar 18, 4:25 PM
    • 37,218 Posts
    • 156,807 Thanks
    silvercar
    Originally posted by Dazed and confused
    You are miss interpreting the levels.

    The primary threshold (the point at which you start to pay NI contributions) is 680 per month.

    The lower earnings limit ( the lowest amount you can earn which qualifies you for the year to count as a qualifying one for state pension purposes) is 490 per month.

    source.
    • silvercar
    • By silvercar 16th Apr 18, 4:21 PM
    • 37,218 Posts
    • 156,807 Thanks
    silvercar
    For 2018-19, the primary threshold is 702 per month, 8424 per year.

    (This is the max amount to earn on PAYE without having to pay any NI contributions.)

    The lower earnings limit, the amount needed to earn to make the year a qualifying one for state pension is 503 per month, 6032 per year.

    Official source.
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