Originally posted by QwertyBerty
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Previously on "National Insurance contributions - Directors"
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Originally posted by Lewis View PostThe NI rate is the same. But directors don't pay until their pay reaches the threshold, whereas employees pay immediately on a pro-rata basis. e.g. If a director is paid £10K per year, a director won't start paying NI until about 6 months into the year, whereas an employee will pay on the first month.
QB.
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Originally posted by skelm View PostAgreed .... but my theory is not flawed is it??
Will that mean only 1 SA ( for director ) to be filled .... or does Co Sec also need this to be done.
Being a company secretary doesn't require you to complete a Self Assesment Form but being paid lots of dividends does, so partner will almost certainly need to complete form (not sure of dividend threshold but it isn't very high).
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Originally posted by skelm View PostAgreed you longer need to have a Co Sec. But is it not a more tax efficient way to operate if you also pay them the ET ( 5435 ) and have them as a shareholder so dividends can be paid as well?
E.g Director has minimum salary( 5435 ) + say 60% shares for dividends
Co Sec also gets minimum salary( 5435 ) + 40% shares for divis
So nearly 11 K is tax free??
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Originally posted by Lewis View PostYeah there is a director resignation form and a company secretary form. Note you no longer need to have a company secretary.
E.g Director has minimum salary( 5435 ) + say 60% shares for dividends
Co Sec also gets minimum salary( 5435 ) + 40% shares for divis
So nearly 11 K is tax free??
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Director's NI is worked out on an annual (pro-rated) basis, whereas employee's is done on a per payment (weekly/monthly) basis.
You can set up the employer's CD so it pays it every month, and then recalculates at the end of the year, if you'd prefer to even out the payments.
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Originally posted by skelm View PostOn a tangent, what needs to be done for one of them to resign as a director and become Co Sec still keeping their shares? I assume companieshouse have a form of sorts.
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Originally posted by Lewis View PostThe NI rate is the same. But directors don't pay until their pay reaches the threshold, whereas employees pay immediately on a pro-rata basis. e.g. If a director is paid £10K per year, a director won't start paying NI until about 6 months into the year, whereas an employee will pay on the first month.
Got confused by the 2.30/week which indeed looks like the self - employed figure. However wondered why one director got the letter yet other didn't.
On a tangent, what needs to be done for one of them to resign as a director and become Co Sec still keeping their shares? I assume companieshouse have a form of sorts.
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Originally posted by QwertyBerty View PostI know that director's NIC is slightly different from ordinary employees. I don't know the exact details but for the last tax year, the HMRC CD software did an end-of-year calculation before closing off the P11.
QB.
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I know that director's NIC is slightly different from ordinary employees. I don't know the exact details but for the last tax year, the HMRC CD software did an end-of-year calculation before closing off the P11.
QB.
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Originally posted by skelm View PostIs this any different from normal NI deducations?
Example scenario:
Company has 2 directors. Both are paid salaries that are on the ET ( £5435 or 453/month ). The rest of their earnings are derived from dividends. HMRC talks about total earnings ( including bonuses ). Is dividends seen as part of total earnings by HMRC?
If i am right, under "normal" NI deductions, the £5435 pays 0% NI same as the tax part? Correct if I am wrong.
Question is asked as I know someone thats has the above situation but one director got a letter from Hector asking for NI for past 13 weeks ( at £2.30/week I think ), the other didnt get one. So slightly confused??
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National Insurance contributions - Directors
Is this any different from normal NI deducations?
Example scenario:
Company has 2 directors. Both are paid salaries that are on the ET ( £5435 or 453/month ). The rest of their earnings are derived from dividends. HMRC talks about total earnings ( including bonuses ). Is dividends seen as part of total earnings by HMRC?
If i am right, under "normal" NI deductions, the £5435 pays 0% NI same as the tax part? Correct if I am wrong.
Question is asked as I know someone thats has the above situation but one director got a letter from Hector asking for NI for past 13 weeks ( at £2.30/week I think ), the other didnt get one. So slightly confused??Tags: None
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