I am just setting up my Quickbooks account, hvaing moved from another accountant. I am a sole director and pay myself the £12,500 lower tax threshold and so shouldn't have to pay any tax on it and no NI until towards the end of my financial year. However quickbooks payroll is immediately trying to deduct quite a lot of tax from my monthly payroll and I can't see why. I am set up as a director in the payroll with the £12,500 salary so I am confused as to why. Can you help?
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Okay katehes1, Thanks for getting back to us, We still need to check a few things to ensure set up correctly, Have you got the Director NI on or off? This is situated in the employee details section of the payroll. And do you have any figures in the payroll history? and what pay period is it that your running? Becky
Hi EmmaM, thanks for the reply. I'm using standard payroll. The amount of tax being deducted is £623.60.
This is the first payment in the tax year - so zero, and then this pay is for £12,500. Thanks.
Thank you for getting back to us, @STBooks.
Please try to check if you have selected Employment Allowance in your account. You also need to enable this option to reduce the National Insurance Contribution (NIC’s) liability. You can do it from the Gear icon.
You can check this article for more information: Changes to Employment Allowance in 2020/21.
I'm always here if you have follow-up questions. Take care and have a wonderful day!