All monies I’ve drawn from the company have been logged into the DLA.
This is my ‘salary’ as such, and at the moment, works out to be an average of £71 per week. (good job I’ve got some savings eh)
Below the LEL, so not currently running PAYE scheme.
(although thinking about doing it retrospectively since 5th April '16 to tie in with tax year for ease).
Currently, this money is having the wrong impact on my corp tax situation (I know it’s not a massive amount, but all adds up).
Do I transfer this from the DLA as a payment out to me, and still tag it as Employee Salary, with Director box ticked?
Or should I ONLY use that once the PAYE scheme is up and running (if I do that)? And if so, should I journal this in, and how?
If I understand correctly you have taken the money out from the business bank account as a simple wage (no payroll software), but tagged those wages as a transfer from the business bank into the DLA which is also classed as a bank, which means it was retained in the company on the balance sheet instead of the trading account.
It should have been tagged as Directors Salaries NC7001
You can easily fix this with a single journal transferring those wages from the DLA NC1201, into Directors Salaries NC7001
When wages exceed the LEL and start using payroll software it will usually provide you with the nominal’s required for each monthly/weekly PAYE journal entry.
1 Like
Thanks George,
Sorry for the late reply.
You understood correctly and your answer was exactly what I need, so again I thank you sir.