What's the best way to handle PayPal?

[Dr. David Kirkby (Kirkby Microwave Ltd)]

On 26 March 2017 at 14:58, Chris Serella <serella_c at hotmail.com> wrote:

> Chris,
> you should speak to your accountant of course, but it is almost certainty
> best to pay yourself a salary of £672/month. Each month the salary can't be
> paid, then the company owes the money to the director, and it goes into a
> director loan account. The accountant needs to notify HMRC of the salary
> payment via an RTI submission.
>
> Each month, you then get credited with National Insurance, despite none is
> paid as long as you don't go over £672/month. In fact, any salary over
> about £450/month (not sure of the exact number), gets credited as National
> Insurance, but does not cost the company or yourself any money!
>
> I'm not an accountant - like you I run a small business, and have been in
> the situation of not being able to pay a salary. Don't just ignore it, and
> keep putting money into the company. Instead, add it to the loan the
> company owes you.
>
> Dave
>
>
> Thank you Dave that is helpful, I presume that in maintaining a director
> loan account that the company will later "repay" the loan, in doing so pays
> my salary. As you suggest speaking to an accountant is going to be needed,
> I knew that it wasnt going to be simple but i had not imagined it to be
> this complicated.
>

Yes, the company can repay it when it has the funds.

I believe you can charge the company interest on the money owed. But I
don't believe it is likely to be worth your while. The amount of interest
you can reasonably charge is probably quite small, but it complicates your
personal tax affairs.

Dave