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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 7901
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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My client is a director of the company and on payroll to

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My client is a director of the company and on payroll to tale salary from his own company. Now he is offered job from other company. When he start another company but He still want to continue his own ltd company as well. So should I do which following way or any other way I can do:
1) His salary is £12000 annually. He should keep his salary the same and also he will be on payroll for second job. We cannot issue P45 so He needs to complete P46 from his new employer and tax code for his own company will be remain 1275L and new employer must be tax code BR for him. So on payroll for his own company I must need to aggregated his earning from new company or both company needs to do own record. So end of the tax year we will aggregated his income from both company.
2) Second option we needs to keep his director salary on part time level so again P46 issues for him.
3) Third option we need to issues P45 for him and not taking his salary from own company but it will be result more CT tax for him.
Please advise me about how own company must to do his payroll and how second company must to do his payroll.
Many thanks in advance. and any advice is appreciated.
JA: Which tax year is this for?
Customer: Current tax year 2021-2022 We submit his self assessment for 2021. First payroll already done for him. Today he asked me he will be employed next month
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: My question he needs to reduce director salary or stay the same amount but how to run his director payroll and what do i need to if he is still on payrol in his own company, He can be two paye schemes on two different company.

Hello and welcome to JustAnswer. I’mCustomer a UK qualified accountant. Reviewing your question and will respond to you shortly.
Many thanks

Thank you for your question.

If your client wishes to keep both jobs, then he should go for option 1.

He gets his full personal allowance against salary from own company and pays PAYe tax on second job under tax code BR.

Both companies operate their own PAYE scheme and he will get two P60s at the end of tax year.

In order to reduce NI contributions for both employee and employer to nil paymen he may wish to consider having a monthly salary of £736 (£8,832pa) from his own company.

My aim is to give you a professional service. I hope this is helpful and answers your question.

If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Customer: replied 7 days ago.
Thank you very much for your answer. I understand I will run payroll for his own company with tax code remain 1257L and second company will use BR for him. If I reduce his salary to 8832 pa for his own company DO I need to run tax code 1257L for his own company. and Second company will still use BR tax code. So End of the tax year I will get P60 from other company and for his self assessment I will add both company. One more question is here. If I reduce his salary £883, Can his remaning Personal allowance be apply end of tax year? So second company needs to do for personal allowance or only use BR tax code and run payroll? I am so thank you for your help.

Thank you for your reply.

You request HMRC to review his tax code and change it to something like 883L against salary from his company and apply tax code 374L against second job.

If he stays on tax code 1257L and draws a lower salary from his own company and tax code BR on second job, he would be due a repayment when he completes his tax return at the end of tax year.

I hope this is helpful and answers your question.

Customer: replied 7 days ago.
I am sorry for this question but This is my first time running Payrol. Do you suggest me contact HMRC to review tax code after learn second employer salary or continue with tax code 1257L for his payrol even if he wants to reduce salary £8830?

Thank you for your reply.

You can continue with current tax code and maybe contact HMRC once the lockdown restrictions have eased.

I hope this is helpful.

If there are no other issues I will appreciate if we could regard my responses/answer to this question as accepted.

Many thanks

Customer: replied 7 days ago.
Thank you very much for your help

Thank you for your kind words. and other Tax Specialists are ready to help you

I thank you for accepting my answer.

I'm glad I could help you resolve this today. Please follow up here if you have any other questions.

Best wishes.