What's the best way to handle PayPal?

[Dr. David Kirkby (Kirkby Microwave Ltd)]

On 25 March 2017 at 17:54, Chris Serella <serella_c at hotmail.com> wrote:

> This brought the issue of self
> assesments which i will still have to complete but wont be liable for
> any tax because as yet the company has not been able to pay me, in fact
> the money flow goes the other way!
>


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