Hi,
I am about to set up my limited and my mate has agreed to go Company Secretary (once we cleared up the matter of him not having to do my typing or wear a short skirt!).
I have agreed to pay him £1,000 a year and was planning to do it in divs to avoid any N.I. or Income tax liabilities. (I know I could get my accountant to go Comp Sec for less, but I owe my mate a few favours and its a two birds with one stone scenario.)
My questions are;
1. Am I correct that the divs route avoids any tax implications for him or my company?
2. Do I need to make him a shareholder to distribute divs to him or can I issue them to him just as Comp Sec?
3. Is there anyway for me to class this as an expense for the business, without incurring all the problems that viewing it as salary might incur? For instance could it be deemed a payment for 'consulations' without it becoming a taxable salary?
Many Thanks
Alan
I am about to set up my limited and my mate has agreed to go Company Secretary (once we cleared up the matter of him not having to do my typing or wear a short skirt!).
I have agreed to pay him £1,000 a year and was planning to do it in divs to avoid any N.I. or Income tax liabilities. (I know I could get my accountant to go Comp Sec for less, but I owe my mate a few favours and its a two birds with one stone scenario.)
My questions are;
1. Am I correct that the divs route avoids any tax implications for him or my company?
2. Do I need to make him a shareholder to distribute divs to him or can I issue them to him just as Comp Sec?
3. Is there anyway for me to class this as an expense for the business, without incurring all the problems that viewing it as salary might incur? For instance could it be deemed a payment for 'consulations' without it becoming a taxable salary?
Many Thanks
Alan
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