Self employed on your own payroll!

Tracy_RutherfordTracy_Rutherford Settling In NicelyRegistered Posts: 19
I have been looking after a particular clients bookkeeping for 7 months now. I was given a pile of mess to sort out the previos bookkeeper had no filing system no nothing. I also looked after the payroll again no records and didn't even do the a payslip. They have 30 employees!
Anyway my client has been advised by his accountant to use a different bookkeeper recommended by this chartered accountancy firm.

I did the hand over the other night and explained to the new bookkeeper that the previos bookkeeper had put the partner on his own payroll. I said I have sorted this out ;i e I have taken him off etc.as this was wrong. The bookkeeper sat there and said y is this wrong. I said you can't put yourself on the payroll if you are a partner or sole trader. He said yes h can! I couldn't believe it! I told him no you can't but he be littled me.

My client also had a limited company so like every accountant near enough advises lond as the conditions are right put the director on the small salary and top up with dividends. Yet again he told me this was wrong and you have to pay tax somewhere. I said yes corporation tax will be a lot lower than paying a high rate of tax on paye.

I just can't believe it he has mived his books to someone who is not going to save him tax just cost him more!

Doesn't it annoy you?

Put ya self on the payroll?!

Comments

  • MonsoonMonsoon Font Of All Knowledge FMAAT, AAT Licensed Accountant Posts: 4,069

    I did the hand over the other night and explained to the new bookkeeper that the previos bookkeeper had put the partner on his own payroll. I said I have sorted this out ;i e I have taken him off etc.as this was wrong. The bookkeeper sat there and said y is this wrong. I said you can't put yourself on the payroll if you are a partner or sole trader. He said yes h can! I couldn't believe it! I told him no you can't but he be littled me.

    My client also had a limited company so like every accountant near enough advises lond as the conditions are right put the director on the small salary and top up with dividends. Yet again he told me this was wrong and you have to pay tax somewhere. I said yes corporation tax will be a lot lower than paying a high rate of tax on paye.

    Erm..... Negligent much?! I'm gobsmacked. That's just awful. Sadly there are a lot of seemlingly qualified people out there who make these kinds of mistakes. And sadly some clients just won't know the difference and will have to learn by trial and error which accountants are good and which aren't. Even more sadly, sometimes they will never find out that their accountant is costing them money not saving them it.

    Obviously I am making comments based on a face-value reading of the thread and appreciate there are always 2 sides to every story but... I can't think of any way in which this doesn't just speak for itself!

    I hope they have good PII cover.
  • Tracy_RutherfordTracy_Rutherford Settling In Nicely Registered Posts: 19
    Just made me start doubting myself! Bugged me all night and as you can see if still is lol. The bookkeeper sounded more like a client when he was saying "i'd rather pay a little of my tax trhough the payroll and less at the end of the year" I said you can't do this the HMRC will not give you a tax code so that you can put yourself on the payroll. He still believed that you could do a year end and have a p60!! He couldn't understand about the directors loan account where you posted the payments they tale as dividends. He said why do this the directors loan account has to be repaid. I said yes that happens when the year end is down and the journals are posted. As long as there is enought profit after tax the directors loan account will be cleared. Oh he started laughing saying why do this id rather have pay less corporation tax then taking a small wage.This is the first client I have had move. But saying that I was waiting until i got another client and then I was going to have a word with him. His wages runs were just crazy! He has 3 payrolls that I ran for him and the girls tell him what they want! EG employees pay £258 employee wants paying £100 cheque £50 cash then the balance £108 cheque! This happens every weeks and each employee has their own preference. They sometimes forget to tell me they are on holiday or had time off which obviously messes the payroll up because they tell me this after I have already ran all the reports backed up and entered payments into sage! Arrrrggghh! Sorry Im having a good moan tonight lol.

    Tracy xx
Sign In or Register to comment.