Company Equipment for Directors

[Stumped]

Hi,
brief question and probably a brief answer !!.

My Ltd. is the standard set-up in that both my Wife and I are directors.

I have a cell phone through the company, question is :- is my fellow director also allowed a cell phone through the company?

Thanks for any advice.
St

[Craig@Clarity]

Hi Stumped,

The brief answer is yes your fellow director can have a cell phone through the company. Here's a link for you HM Revenue & Customs: Telephones - mobile

[Danielsjdaccountancy]

If she is actively working on the contracts then yes it is a valid business expense. If not, then it shouldn't be put through and you need to also question why she is a Director in the business.

[northernladuk]

If she is actively working on the contracts then yes it is a valid business expense. If not, then it shouldn't be put through and you need to also question why she is a Director in the business.

Isn't that because the general advice given by accountants to reduce tax liabilities is to make your spouse a director and pay them divi's?

[Sockpuppet]

Isn't that because the general advice given by accountants to reduce tax liabilities is to make your spouse a director and pay them divi's?

No that general advice would be to make them a shareholder and pay them divis.

Director != Shareholder.

[Craig@Clarity]

If she is actively working on the contracts then yes it is a valid business expense. If not, then it shouldn't be put through and you need to also question why she is a Director in the business.

If she is a director or employee and the cell phone was in the company name, then it can be put through as a valid business expense. The link I gave should describe the difference between a mobile and PDA which have slightly different treatments as to whether they are treated for a benefit in kind. This is regardless of if she is "working on contracts". If she was doing administration or building a website for the company or marketing the business it doesn't prevent her from having a phone.

Also, even if she was not working on contracts, as previous post suggests, there are other reason why she could be a director. You don't have to be actively generating income in the company to be a director of a company.

[Danielsjdaccountancy]

We would recommend making them a minority shareholder and pay them dividends as there is no need for them to be a director.

Surely if there is only one individual working on a contract then making him the sole director is sufficient, what reason is there for anyone else to become director?
Through making a partner director you now have to also file a self-assessment.

They would also be named on the accounts as Mr and Mrs, so a signal to the revenue for the old income shifting chestnut potentially.

[Martin at NixonWilliams]

We would recommend making them a minority shareholder and pay them dividends as there is no need for them to be a director.

Surely if there is only one individual working on a contract then making him the sole director is sufficient, what reason is there for anyone else to become director?
Through making a partner director you now have to also file a self-assessment.

They would also be named on the accounts as Mr and Mrs, so a signal to the revenue for the old income shifting chestnut potentially.

Hi Daniel

One reason maybe linked to entrepreneurs relief when closing the company?

To qualify you must be either an officer or employee of the company during the qualifying period. Further criteria also applies that can be found on the HMRC site:

you must be either an officer or employee of that company

One way around the officer bit might be to make them a secretary not a director but they still might need to do a tax return depending on their dividend income (and other income).

Martin

[LisaContractorUmbrella]

On the subject of the mobile phone - if your wife is actually employed by the company i.e. works for it in a way that produces tangible results (rather than just name on letterhead) then the cost will be allowable - otherwise IMHO nope

[Joeman]

They would also be named on the accounts as Mr and Mrs, so a signal to the revenue for the old income shifting chestnut potentially.

So is there less chance of the tax man visiting if youre not married?? (ie names different)