Can you accrue NIC's?

[Early Retirement]

I have recently set up a company and have decided to pay myself £425/month which will use up my personal allowance and only just tip me into NIC's.

My question is this:

For the first six months or so I will not actually pay myself but will accrue the wages (for cashflow reasons). Can I therefore accrue the associated NIC's and pay them over when I do actually take the wages owing to me (i.e. six months worth in one go). Or do the NIC's have to be paid over, as normal, by the 19th of the following month to which the wage relates irrespective of whether I pay out the wage or not?

I hope you understand what I mean and would really appreciate some help on this.

[hashman]

I assume you are a director? In that case NIC is charged on an annual basis.

When you say 'accrue' do you mean by making entries in the books or by accruing them without making any entries?

[Early Retirement]

Thanks for replying, hashman.

Yes, I am a Director. When you say NI is charged on an annual basis, what does that mean from the standpoint of actually paying it?

When I say 'accrue' I mean by making entries in the books, so the wages creditor will increase by £425 every month.

Thanks again

[hashman]

You pay NICs as you go along but at the end of the year you recompute. This is because of the possibility of irregular payments being made to give a reduced contribution due to the monthly upper limit.

The next question is does accruing the payment in the books amount to payment? I think it does as you would be entitled to draw that sum from the company. So you should compute NIC monthly and pay over with adjustment after the year end.

You should get a hold of booklet CA44 which deals specifically with directors

[King_Maker]

The normal method is to pay oneself a salary of above £82 pw but below £94 pw - for 2005-06. This will mean no NI (neither Employer's or Employee's), but you will still get Credit for these (non) Contributions.

Dividends, if distributable reserves available, can be paid on top.

As each case is different, speak to your accountant.