Director re-investing all profits.

[poopscoop]

Hi

If I re-invest 100% of my profits into the company. All I pay is Corporation Tax right? And I don't need to be classed as an employee?

Thanks

[Sockpuppet]

Not sure if your a serious question or just DimPrawn or MF playing about but:

You have to set up a Employee Scheme with HMRC even if no emlpoyees are being paid.

Might as well be an employee. £5035 each year tax free (plus expenses). I dont think you can pay expenses to non employees.

[ASB]

Hi

If I re-invest 100% of my profits into the company. All I pay is Corporation Tax right? And I don't need to be classed as an employee?

Thanks

1) You have no profits. The company does. I assume you therefore mean retain.

2) Yes those profits chargeable to CT. They may be chargeable to other things depending upon any regime they fall under.

3) If you are a director and do not have a contract of employment then you are likely an office holder not an employee. You can find guidance on the HMRC and DTI websites. About the only thing this makes a difference to is whther NMW applies or not.

If you were asking the question from an IR35 type perspective then doing what you propose will not make any difference to your personal tax bill.

[poopscoop]

thanks