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Replies to Queries 3

28 January 2003
Issue: 3892 / Categories: Forum & Feedback
Bad advice

We have recently commenced acting for a limited company which currently only has two directors but had four six months ago. The company had a pay-as-you-earn compliance visit. Copies of the P11D forms for 2000-2001 for the two ex-directors included entries in section K box 1.22 'services supplied' totalling £108 000. The services related to wages paid to builders completing works on the two former directors' private houses. The two directors put the builders' payments through the company's payroll and the company paid the PAYE and National Insurance. At the tax year-end the internal accounts department completed the P11Ds and rang the Inland Revenue to seek advice on what to do. They were told to put the gross wages plus the employer's National Insurance contributions applicable to the builders in box 1.22. The company was told that Class 1A would not be due...

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