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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hi there, I am preparing a set of LTd company accounts, they

Customer Question

Hi there, I am preparing a set of LTd company accounts, they are a new client. Previously they had accrued income of £4,500 ..this didn't exist and was a made to fit sum.
There is only a Director on the payroll...is it possible to have accrued salaries for his wife, to be paid this year. She is a non tax payer and was on the payroll the year before last year.
I know with RTI she cant be paid retrospectively...
Thank you.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.
I see no problem with this, but the ghastly RTI system will make any salary paid to the wife a taxable emolument in the 14/15 tax year. Watch out for NI deductions though on RTT; GBP 5772 is the annual Lower Limit, but 4.4K paid in one chunk will exceed the monthly limit of 481. On RTT the PAYE tax deductions will smooth out by tax refunds is subsequent months to make her tax neutral by April 2015.
In the company's books, it is an 'Creditor under provided for' item,' an exceptional item in the Profit and Loss account.
I do hope I have shown you a way forward in thus matter.
Customer: replied 2 years ago.

Thank you very much....what do you mean by an exceptional inem in the p&L? Not seen very often?

I don't mind that as long as its not illegal ;)

Expert:  bigduckontax replied 2 years ago.
An exceptional item in final accounts is quoted as a separate item after normal trading activity.
It is perfectly legal. Please be so kind as to rate me before you leave the Just Answer site.
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Customer: replied 2 years ago.

Thank ypu very much for your help.

Expert:  bigduckontax replied 2 years ago.
Delighted to be of assistance.
Thank you for your support.

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