PAYE Limited company is it compulsary?

PoodlePoodle Experienced MentorPosts: 711Registered
Hi

If you have a close company with directors having income elsewhere so not taking a salary, only dividends, but they are taking off business expenses that would not be reported on a P11d from the company, does the company still have to be registered for PAYE?

Poodle

Comments

  • groundygroundy Trusted Regular Posts: 495Registered
    It is my understanding that the company must be registered for PAYE as the directors are still employees whether or not they take a salary.

    I would suggest requesting the PAYE scheme to be on an annual basis explaining that no they are non salaried directors and no other employees and then submit a nil P35 at year end.
  • PAMDILLPAMDILL Experienced Mentor Posts: 715Registered
    I have several limited companies which have directors and trade but no wages paid. I checked with HMRC a few years ago and they stated did not have to register as an employer.
  • A-VicA-Vic Expertise Guaranteed Posts: 6,970Registered
    PAMDILL wrote: »
    I have several limited companies which have directors and trade but no wages paid. I checked with HMRC a few years ago and they stated did not have to register as an employer.

    Totally agree - We have a number of limited companies on the books however only a few of them are reg for salary reasons not all of them have to be :001_smile:
  • PaulPSBPaulPSB Feels At Home Posts: 55Registered
    If there are any BIK requiring P11D then the company will need a PAYE Ref even if no salaries so there is a record to post the P11D against. :001_smile:
  • deanshepherddeanshepherd Font Of All Knowledge Posts: 1,809Registered
    Paul makes a very good point. It is highly likely that close company directors are, if nothing else, reimbursing expenses that are P11D reportable. Obviously a dispensation would cover most of them but you cannot submit a dispensation application without a PAYE scheme in place.

    That said, if there is no salary and only s.336able(?) expenses are reimbursed and the directors do not want a PAYE scheme set up then I would be inclined not to do so.
  • PoodlePoodle Experienced Mentor Posts: 711Registered
    Thanks guys

    I will leave as is for the mo and just wait until they want to pay for their personal tax returns through the company:001_smile:

    Poodle
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