Directors pay and self assessment

Psyche

Hi there,
OK, I am probably having a mental block here. But I have a client who's a company director, he started his company midway through the tax year. So he has a P45 from his previous job.
As is the prerogative of company directors, during the last tax year he paid himself under the NI threshold thus avoiding having to register for PAYE. So he has no P60. But presumably he still needs to put the £90 per week on his self-assessment as income from employment, right? Even though he does not have a P60 to prove it?
Thanks!

JodieR

Yes, the salary will need to be included despite the lack of P60. I don't know what you enter in the PAYE reference field if none exists, but I'm sure there's guidance on it somewhere.
Directors will usually register the company for PAYE though and pay themselves at a rate between the Lower Earnings Limit and the Primary Threshold to ensure that they get NI credits for the year despite not making any contributions.

jodie

Bluewednesday

Although he does not have a P60 presumably he has payslips to prove it?

Monsoon

If he doesn't have a P60, he won't have been paid enough salary to accrue NI credits, surely?

Why not £476.25 a month?

Psyche

Bluewednesday: He has been doing his own payroll so I doubt he has made up payslips for himself. All I have is his business bank account showing payments made to himself and communication from him saying that this is salary. (For 2010-11 he has gone to paying himself just above the NI limit, but for 2009-10 he did not do this.) Oh, and he has been using the HMRC CD-Rom.

So I do know what the amount was anyway, and I can just include it on the self-assessment. I guess the limited company accounts showing the payment of salary would be evidence if any were required?

Monsoon

Ah, ok.

If he's now paying himself above the limit, presumably he has a PAYE ref number now? I would be inclined to put that on the employment pages, along with what he was paid.

Psyche

Yes, I think what he did last year was register with HMRC so he could get the CD-Rom, but then informed them each quarter that there was no tax to pay. So he will have a PAYE reference to put on the self-assessment return, and I will just put the total he paid himself during the tax year.
Thanks for your help.