Payroll journals and assigning payroll to DLA

[Laney]

I was going to use QF to get a quote to file my year end, but realised I haven’t been recording my payroll (I’ve been filing it using the HMRC BPT). So, my questions are…

1. Can I record the whole year’s payroll in one journal or should I add a journal for each month - or doesn’t it make a difference?

2. I’m only paying up to the secondary threshold, so my previous payslips (from a different software provider) shows 0.00 for income tax, national insurance and other deductions. Do I need to add these rows to the journal and/or do I need to add the rows shown in the ‘Recording payroll’ example? It does say, “For example, if there’s no student loan deductions, then you wouldn’t need to include this.”

3. As per how my previous accountants did things, I record payroll, but as the company doesn’t have the necessary funds at the moment, I don’t withdraw that amount from the company account - so I believe it goes to the DLA. That being the case, for the journal, do I put the basic pay in the debit column as (7001) Directors Salaries, and the same amount in the credit column as (1201) Director’s Loan Account? Or have I misunderstood…?

Any help would be appreciated - many thanks in advance!!

[Paul_Courtier]

That should be fine to journal it in that way.

I would think carefully about the date of the journal and when the posting to the dla should be made.

Are you a director with a one off annual payment? Or have you submitted monthly rti 's?

I would do one journal if its one payment or I would do multiple if the rtis I sent in monthly.

Making sure to match the journal date with the payment date shown on your wage slips.

It helps for better reconciliation should you have an hmrc enquiry. Avoids questions you have to answer.

[Laney]

@Paul_Courtier - thanks so much for getting back to me!

I’m a director and the only employee. Yep, I’ve been submitting RTIs monthly, so will do as you suggested and create a journal for each month, matching the date of the submission/payslip.

I’ve been using QF since Sept, so my payroll for the company year from Dec 2019 to Sept 2020, was included in the opening balance from my accountant. They didn’t actually include Aug payroll, so I guess I should do journals as described (7001 debit, 1201 credit, nothing listed for income tax, national insurance and other deductions) for Aug until now - is that correct?

I recently discovered that I’ve been doing my RTIs wrong and now need to correct them for the closed year. It won’t make any difference to the 0.00 I owe HMRC, but am intending to put what I should have put as the monthly payroll into QF (ie secondary threshold amount), so that my year end accounts will match HMRC once I’ve made the corrections. Does that sound about right?