Paying Mrs Mustang

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PhilAtBFCA replied

25 September 2009, 07:10
Mrs Mustang

Mustang,

I think the four options have been reasonably covered.

A couple of extra points to think about:-

1. If paying a salary to an employee or directors fee, remember that reasonable and explainable amounts, and actual work needs to be done. Getting something for nothing may be good for Mrs Mustang, but cause Mr and Mrs Mustang Ltd HMRC compliance problems.

2. Mrs Mustang as a director, not only has the right of input on how you run your business to a certain degree, she also has equal responsibilities, so if your business ends up on the scrap heap, then Mrs Mustang may be affected too, I would be sure she realises those responsibilities are real and what they are !

3. I am sure Mr and Mrs Mustang have a lovely two car garage so to speak, but if there was ever a Mr Mustang and Miss Corvette, or even a Mrs Mustang and Mr Cherokee; then having Mr and Mrs Mustang in the same company can be, how can I put it, a bit of a problem.

Must be Friday...

Phil
Leave a comment:
northernladuk replied

24 September 2009, 16:07
If Mrs Mustang were to contract through MyCo, what would be the best way to pay/give funds to her? Has anyone else been in this situation?

You have forgotten Option 4 which I would have thought was defacto standard

4) It's all Mr's M's and always has been even before she contracted through your Co.. You can ask for some spend and the odd night out and cross your fingers as you have always done

Thought you would have sussed that out by now!!
Leave a comment:
blacjac replied

24 September 2009, 14:31
Create a new class of shares and issue them to her.

The differing classes of shares means different divi declarations for each. Your accountant will be able to help.
Leave a comment:
Mustang started a topic Paying Mrs Mustang

24 September 2009, 14:16
Paying Mrs Mustang

If Mrs Mustang were to contract through MyCo, what would be the best way to pay/give funds to her? Has anyone else been in this situation?

As I see it there are 3 alternatives:

1) Set up a contract of employment with Mrs M and therefore pay her a salary. Downside: extra tax and NI

2) Issue shares to Mrs M and pay her divi's. Downside: I would have to receive divis at the same time in proportion to our share holding. I could of course leave these in MyCo.

3) Make her a director and pay her a salary as and when (i.e. no contract required). Downside: she has a say in the running of MyCo.

Anyone else thought of something else or got an opinion on the above?!
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