Thanks for your active engagement and for providing follow-up information about your scenario, Dave. Allow me to assist you further and guide you through removing a director in QuickBooks Online Payroll without affecting HMRC.
The individuals who hold positions as directors within a company are considered employees, and the money they earn is liable to National Insurance Contributions (NIC). They are required to pay NIC on their salary and bonuses that exceed a specific threshold, which is determined by their yearly earnings rather than their monthly or weekly wages.
If you need to remove one, the process is the same as you would for a regular employee leaver. And I'd be glad to show you how:
To ensure accurate recording of tax and NIC in QuickBooks Online Standard Payroll, it is important to have a prepared P45 form. This form should be given to the employee, and it helps in notifying HMRC about the employee's final payment. By deleting the Director's NIC calculation method entry in the FPS (Full Payment Submission), you can inform HMRC that the employee is no longer a director. Additionally, any outstanding National Insurance owed by the director should be deducted from their final payment.
If the director is staying on as a regular employee:
- Go to the Employees or Payroll menu.
- Select the employee.
- In the Tax Information section, choose No for Company Director.
The employee will continue to pay NI as a director until the end of the current tax year.
Moreover, I have attached an article that will assist you in efficiently carrying out payroll runs and ensuring compliance with HMRC regulations. This can be achieved by utilizing the "To Do" list available on your Standard Payroll dashboard, which helps you stay organized and up-to-date: Standard Payroll hub in QuickBooks Online.
If you have any additional inquiries or require further support in managing your employees or directors, please feel free to reach out to the Community team. We are dedicated to assisting you throughout the entire process. Your business is important to us, and we are committed to ensuring a smooth experience as you continue to utilize our Online Payroll service. Have a wonderful day!
