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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am recently separated (Oct 13) and a single persons claim

Resolved Question:

I am recently separated (Oct 13) and a single persons claim has been submitted for child and working tax credits. The claim has been passed to compliance who are asking for reams of documentation. I am a director of a limited company (many years dormant that I reinstated approx. 4 years ago to establish a business - during which time I retrained and am slowly moving into a different version of the business. Slowly, as I have three teenage children - now sole charge - and have moved house three times in the period!) I have not set up PAYE as I do not pay myself regularly but have taken some drawings over the years. After a telco with them they have asked for business bank statements, accounts and a letter explaining how I work - as I'm based from home and work online! Can you tell me the best way to set up to fit their criteria instead of jumping through hoops or resigning myself to their requirement to be in paid employment 9-5!
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

In my view you should start paying yourself a salary under PAYE as opposed to taking drawings on adhoc basis if you are running your business as a LTD company.

Using HMRC basic tools it is fairly easy to operate PAYE under RTI. I do that for several clients who are one person operation.A regular salary albeit a small figure would regularise your income and you could produce P60 showing your earnings every tax year. If there was surplus cash you could draw it as dividends.

Operating PAYE scheme for your own company does not necessarily mean you are in paid employment 9-5. Maintaining business records and accounts is a pre requisite in any type of business.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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