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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 7980
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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I've just submitted my first-year accounts for the previous

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I've just submitted my first-year accounts for the previous accounting period. The accountant I hired asked if I wanted to pay myself a salary which I did (£5858.67) and he suggested I use HMRC Basic PAYE tools to create an Earlier Year Update (EYU) to send to HMRC and then prepare a P60 manually. Is this the correct way of doing it? Many thanks in advance.
JA: Have you talked to a tax professional about this?
Customer: Yes
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: Don't think so. The accounts and tax return has been filed as me receiving a salary, so I basically just need help on how to correctly report this via HMRC. Thank you.
JA: For which tax year do you need help?
Customer: 20/21

Hello and welcome to JustAnswer. I’mCustomer a UK qualified accountant.

Please advise

- how many employees you have

- have you registered the company as new employer for PAYE scheme

- are you drawing a salary regularly in the current year
Many thanks

Customer: replied 8 days ago.
Hi,I am the only employee (director)
I have registered the company for the PAYE scheme
I have yet to draw a salary for the current year (but signing up with an accountant this month who should help me with this) - so all tax relating to my current accounting period will be taken care of.Thank you
Customer: replied 8 days ago.
The issue I encountered with the Basic PAYE tool is that HMRC guidelines say that Earlier Year Update (EYU)should only be used for the tax years 2019 to 2020 or before. Otherwise I should use the Full Payment Submission process (FPS). So I just want to know the correct process for paying myself for 20/21. Thanks

Thank you for your reply.

A practical solution for the tax year just passed -

Report this income either at salary in the employment section or as other taxable income with the main tax return and provide notes under any other information box stating something like salary drawn from company but PAYE scheme not operated until the following tax year.

I suggest you start paying yourself salary under RTI for this year going forward.

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 8 days ago.
Thank you for your answer. So the tax return has already been submitted with the salary stated as being drawn. So what you're saying is to not enter anything into the HMRC Basic PAYE tool? I will be paying myself regularly moving forward.

Thank you for your reply.

Normalise payments to you moving forward.

You have already notified HMRC of salary received for last year on your tax return.

I hope this is helpful and answers your question.

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

Many thanks

taxadvisor.uk 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.