Reply to: New Contract - Daily Expenses

[SueEllen]

What about redundancy pay offs?

Is there some silly loophole where I can employ one of my kids, have them do some work for me then dismiss them with a compromise agreement to get money out of the company without paying anything other than the payoff? The little parasite might be of some use after all

If your kid threatened to do you for age, religious or sex* discrimination then they don't need to work for you for two years and it can be just be over you insulting them. Just make sure they have evidence of the discrimination. Probably help if some outside body was involved as well and they had to move out of home.

*Sex discrimination includes a wide range of things.

[northernladuk]

What about redundancy pay offs?

Is there some silly loophole where I can employ one of my kids, have them do some work for me then dismiss them with a compromise agreement to get money out of the company without paying anything other than the payoff? The little parasite might be of some use after all

Well they would have to work for you for two years to be eligible. What's more likely is you'll not do it right, kids will take you to an employment tribunal and take you for every penny you've got, war chest and all. Little bastards.

[LondonManc]

Only because "family members of the employer living in the employer’s home" - which doesn't make any sense to me. The employer is a limited company, so by it's very nature cannot have any family.

Company directors are exempt from the NMW because they aren't employees.

What about redundancy pay offs?

Is there some silly loophole where I can employ one of my kids, have them do some work for me then dismiss them with a compromise agreement to get money out of the company without paying anything other than the payoff? The little parasite might be of some use after all

[Snarf]

Only because "family members of the employer living in the employer’s home" - which doesn't make any sense to me. The employer is a limited company, so by it's very nature cannot have any family.

Company directors are exempt from the NMW because they aren't employees.

Interesting, my understanding was that even a director who was an employee would be exempt from NMW..
If it ever becomes an issue that I have to know about I'll ask the accountant!


Edit, just had a quick look, unless the director has entered into a contract with the company NMW doesn't apply... So really the issue then is determining at what point you are deemed to have a contract with yourCo written or otherwise..

Anyway, think I've hijacked the thread enough, thanks for responses - given me some stuff to look up

[TheFaQQer]

Scroll up, that's not the case.

Only because "family members of the employer living in the employer’s home" - which doesn't make any sense to me. The employer is a limited company, so by it's very nature cannot have any family.

Company directors are exempt from the NMW because they aren't employees.

[Snarf]

If you are an employee you have to be paid minimum wage, along with the tax and national insurance that goes with it.

As a director, you do not.

Scroll up, that's not the case.

[blacjac]

If you are an employee you have to be paid minimum wage, along with the tax and national insurance that goes with it.

As a director, you do not.

[Snarf]

My company pays a stipend for my work as an officer of the company.

As a shareholder in the company, I am entitled to any dividends that the board determines should be paid out, in proportion to my shareholding.

I am not an employee of any company, so am not entitled to any employee rights from any company of which I am a director.

Hi, I'm interested in the reasoning for that? Is there a benefit to that over being the sole director and employee of your company?

[Snarf]

Erm.. Your statement and the bolded section don't match up. You say they are, the statement says they 'MAY have an employment contract' ?????

Of course you're right, meant to say can be employees... Rather than implying they had to be.
Curious though what are the benefits of being a director and not an employee (in the context of being a contractor operating through a LTD?)

[TheFaQQer]

So, TheAfQQer - how does your ltd pay you?

My company pays a stipend for my work as an officer of the company.

As a shareholder in the company, I am entitled to any dividends that the board determines should be paid out, in proportion to my shareholding.

I am not an employee of any company, so am not entitled to any employee rights from any company of which I am a director.

[TheFaQQer]

Directors are still employees.

Nope - they MAY be employees, but in many cases they aren't employees.

This is particularly true in the case of companies where one is a non-executive director - I have a director's contract which specifically says that I am not an employee, for example.

[northernladuk]

Erm.. Your statement and the bolded section don't match up. You say they are, the statement says they 'MAY have an employment contract' ?????

[Snarf]

You shouldn't be an employee, you should be the Managing Director.

Directors are still employees.

Source:

https://www.gov.uk/employment-status/director

To save you looking :

Directors have different rights and responsibilities from employees, and are classed as office holders for tax and National Insurance contribution purposes.

If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights.

[Snarf]

Ummm...

So I refer you to the answer I gave some moments ago:


Personally, I'd be wary of being employed by my company because of the need to pay NMW and all that fun and games that being an employee rather than an officer entails, but it;s your call. What does your contract of employment say about being reimbursed?

Minimum wage doesn't apply to directors of companies or employees who are also family members living at the same address as a director.
So, TheAfQQer - how does your ltd pay you?

Source :
https://www.gov.uk/national-minimum-...e-minimum-wage

Specifically :

"Not entitled to the minimum wage
The following types of workers aren’t entitled to the minimum wage:

self-employed people running their own business
company directors
volunteers or voluntary workers
workers on a government employment programme, eg the Work Programme
family members of the employer living in the employer’s home
non-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation, eg au pairs"

[TheFaQQer]

I am not registered for VAT so how/Why would i be claiming the tax relief ? Claiming Expenses is what i initially asked about, but it seem's that i am able to to this anyway for the standard daily items through the Ltd Scheme

I'd be wary of referring to operating a company with limited liability as a "scheme".

Words like that tend to set alarm bells ringing in certain places.