Reply to: Living Wage

[john@UKCA]

No.

Go back to your Accountant then and state that the living wage and the NMW do not apply to Directors with no service contract.

[pjt]

OP, do you have a contract of employment with yourCo?

No.

[Alan @ BroomeAffinity]

One benefit to having a contract and therefore NMW is you MIGHT be able to claim redundancy when the company is closed.

[Alan @ BroomeAffinity]

Just gone and checked the advice from my accountant, which was that if you want to claim SMP/SPP, you may need a contract of employment, and would need to pay NMW.

SSP is no longer recoverable so this wouldn't be s benefit. If you don't qualify for SMP you can get maternity benefit at the same rate.

And in any event I'm almost certain that you still qualify even without NMW.

https://www.gov.uk/guidance/statutor...-pay#directors

[mudskipper]

My accountant has suggested I should increase my salary to £13,104 to take into account the living wage changes. Has anyone else been recommended to do this? My understanding was always that as I Director this was not something I had to worry about, as the minimum wage rules etc did not apply.

OP, do you have a contract of employment with yourCo?

[mudskipper]

Some people want to have a contract of employment for various reasons. If you have a contract of employment, my understanding is that you have to pay NMW.

Just gone and checked the advice from my accountant, which was that if you want to claim SMP/SPP, you may need a contract of employment, and would need to pay NMW.

[Alan @ BroomeAffinity]

Some people want to have a contract of employment for various reasons. If you have a contract of employment, my understanding is that you have to pay NMW.

Yep. Fair point.

[mudskipper]

Not sure even that makes sense tbh. The only two (under normal circumstances) that are sensible options are the LEL and the PA. I can't see the point in anything else. Although I do know of many accountants locally who insist on the use of NMW, I can't see the point in even presenting it as an option - except in a "don't to do this" scenario.

Some people want to have a contract of employment for various reasons. If you have a contract of employment, my understanding is that you have to pay NMW.

[Alan @ BroomeAffinity]

My accountant listed 3 or 4 options, one being NMW for those who wished to go that route but it wasn't advised.

Not sure even that makes sense tbh. The only two (under normal circumstances) that are sensible options are the LEL and the PA. I can't see the point in anything else. Although I do know of many accountants locally who insist on the use of NMW, I can't see the point in even presenting it as an option - except in a "don't to do this" scenario.

[john@UKCA]

Perhaps the Director has been given a Contract which makes him a worker subject to the NMW?

[d000hg]

My accountant listed 3 or 4 options, one being NMW for those who wished to go that route but it wasn't advised.

[WordIsBond]

Is that what Accountants are like when they are circling for a kill?

LOL.

Whenever I read about an accountant giving advice that doesn't make any sense, I always wonder what is the rest of the story. And if I'm going to be bothered to comment on it, I try to think of the scenario that would make the accountant's advice make sense. Outside income? Foreign income? Something to do with spouse?

I can think of ONE case that might make sense. If OP also is self-employed doing something else, and has self-employment losses to set off against the income, AND is employing a spouse so he gets to use Employment Allowance, then MAYBE this would make sense. But since the reason given was the Living Wage, I conclude that OP's accountant is probably an idiot. I'm with Alan. I'd be disengaging as soon as....

[Alan @ BroomeAffinity]

@stek: it amazes me what sh!t clients (not mine obvs) will put up with from their accountants. You wouldn't employ a brickie if he had to ask on a forum how to mix up mortar.

[northernladuk]

OK guys thanks for the quick update. I'll bring it up when I next see him

See him? Is this a local bod and not one of the bigger contractor specialists?

[stek]

Is that what Accountants are like when they are circling for a kill?