Director Salary question

[ASB]

and there are several minimum NI limits depending on the class you're talking about, so worth doing some more reading there.

The words hmrc use are:-

"you're paying them at or above the National Insurance Lower Earnings Limit"

So it seems reasonable to assume 109/week. Though of course things can happen later in a year which may mean registration should have happened earlier.

Personally if an employer doesn't want to register for whatever reason I would have thought it sensible to ring up HMRC, explain thier specific situation and ask. Then note the answer and call reference. At least this has some chance of avoiding penalties etc later on should it be the wrong decision was made.

[Clare@InTouch]

Repeating myself. Due to the way expenses are treated these are benefits. This mandates registration for paye in my view.

it's no big deal. Couple of annual forms that's all.

^ This. It's also important to understand that there's a difference between P11d reportable expenses and non-P11d expenses, like mileage.

You've mentioned a tax return too, which you don't have to do because you're an employee but because you're a director and will be in receipt of untaxed income in the form of dividends.

The financial year end of the company has no connection with the personal tax year, which is the one that ends on 05th April. Your company year end, unless you've changed it, will default to the end of the month plus one year after you incorporated.

I believe the limit for not registering for a PAYE scheme is actually lower than the minimum NI limit, and there are several minimum NI limits depending on the class you're talking about, so worth doing some more reading there.

[malvolio]

Thank you every one for sharing your views.

As mentioned its a recently incorporated new business which has not started trading yet so i have not hired the services of an accountant. I will hire accountant in near future although i am a professionally qualified accountant with major in Management Accountancy and business decision making but as i am not from UK therefore i have no idea of UK taxation and statutory requirements.

I am new in UK and have never been employed in UK, i will take salary from my company but that will be within minimum threshold of NI. So my understanding is that my company will pay me salary but will not register with HMRC as PAYE and there will be no tax deductions or NI deductions. secondly i as the employee will only be liable to file a self assessment return and that i assume will be after my financial year ends on 5th April 2014.

Now i assume that i can claim expenses related to company like car mileage, travelling expenses, calling expenses from the company which i will pay to perforrm my duties as the director of the company. Is my understanding correct.

Thanks

Sorry, but which bit of "read the guides" do you not understand? All your questions are fully answered in them, we are not about to write it all out for you, And you need a UK accountant no matter how qualified you are since clearly you have no understanding of UK corporate law.

HTH...

[ASB]

Thank you every one for sharing your views.

As mentioned its a recently incorporated new business which has not started trading yet so i have not hired the services of an accountant. I will hire accountant in near future although i am a professionally qualified accountant with major in Management Accountancy and business decision making but as i am not from UK therefore i have no idea of UK taxation and statutory requirements.

I am new in UK and have never been employed in UK, i will take salary from my company but that will be within minimum threshold of NI. So my understanding is that my company will pay me salary but will not register with HMRC as PAYE and there will be no tax deductions or NI deductions. secondly i as the employee will only be liable to file a self assessment return and that i assume will be after my financial year ends on 5th April 2014.

Now i assume that i can claim expenses related to company like car mileage, travelling expenses, calling expenses from the company which i will pay to perform my duties as the director of the company. Is my understanding correct.

Thanks

Repeating myself. Due to the way expenses are treated these are benefits. This mandates registration for paye in my view.

it's no big deal. Couple of annual forms that's all.

[Crossideas]

Thank you every one for sharing your views.

As mentioned its a recently incorporated new business which has not started trading yet so i have not hired the services of an accountant. I will hire accountant in near future although i am a professionally qualified accountant with major in Management Accountancy and business decision making but as i am not from UK therefore i have no idea of UK taxation and statutory requirements.

I am new in UK and have never been employed in UK, i will take salary from my company but that will be within minimum threshold of NI. So my understanding is that my company will pay me salary but will not register with HMRC as PAYE and there will be no tax deductions or NI deductions. secondly i as the employee will only be liable to file a self assessment return and that i assume will be after my financial year ends on 5th April 2014.

Now i assume that i can claim expenses related to company like car mileage, travelling expenses, calling expenses from the company which i will pay to perform my duties as the director of the company. Is my understanding correct.

Thanks

[VectraMan]

Technically he is, despite what it says on HMRC website, being registered for PAYE is not a legal requirement just because you are a director. Last year I explained I was never likely to pay PAYE on my pathetic plan b (plan z) and they deregistered me. You need to make sure you register only when there are real possible tax implications.

But that's not the same thing. My Co. hasn't been PAYE registered for 2 years because I've been a permie and only paid money from it as dividends, which makes sense if you're on PAYE elsewhere (and I never had to explain anything to anyone). However if you pay yourself £5K from Yourco as salary (salary being different from dividends), then do you really not have to register? I don't know, but it sounds unlikely.

[northernladuk]

Hi,

I have incorporated a limited company and i am the sole director of this company. the company has not started trading yet so i am not taking any salary from the company. Now my questions are

1- If a Director is not taking salary then are there any legal problems with company house or HMRC? i mean is there any legal requirement for a director to be employed by the company?
2- Whether a non salaried Director is required to file nil return?
3- If a Company has only one director on its payroll and that director is taking salary below NI threshold then should the company get registered as PAYE with HMRC.
4- If a Director is taking salary which is below minimum threshold of NI then should the director get registered with HMRC and also file annual return.

Will appreciate your detailed replies

Thanks

Won't your accountant deal with all this for you?

[xoggoth]

On this question I have been told explicitly by my accountant that it is not necessary to be PAYE registered if taking salary below the NI threshold.

I hope they're right!

Technically he is, despite what it says on HMRC website, being registered for PAYE is not a legal requirement just because you are a director. Last year I explained I was never likely to pay PAYE on my pathetic plan b (plan z) and they deregistered me. You need to make sure you register only when there are real possible tax implications.

[ASB]

On this question I have been told explicitly by my accountant that it is not necessary to be PAYE registered if taking salary below the NI threshold.

I hope they're right!

HM Revenue & Customs: How to register as an employer

the problem though is benefits. If any benefits are paid registratio is needed. I believe expenses will count. Might be wise to clarify.

[aoxomoxoa]

3- If a Company has only one director on its payroll and that director is taking salary below NI threshold then should the company get registered as PAYE with HMRC.

On this question I have been told explicitly by my accountant that it is not necessary to be PAYE registered if taking salary below the NI threshold.

I hope they're right!

[cojak]

If the company does not earn money then everything will be fine (apart from the Companies House Annual Return of course). Once the company starts earning, HMRC will want their 21% Corporation Tax.

What happens to the rest of it will be up to you...

http://www.contractoruk.com/limited_..._dividend.html

http://www.contractoruk.com/limited_...ntractors.html

http://www.contractoruk.com/limited_companies/

[ASB]

1.No and no. A director is foremost an officer of the company. They can be an employee if required.

2. Yes. Assuming you are talking about an satr. If you are talking about some other return then identifying it would help.

3. Yes. And of course the company must submit the appropriate annual returns. Do p60 etc.

4. I dont know what you mean by registered with hmrc. There is no specific requirement to tell hmrc you are a director. There is a requirement to fill in a satr. Hmrc will send notice to do so if they know you have to. That does not remove your responsibility to do so. You can register on hmrc website.

[malvolio]

Hi,

I have incorporated a limited company and i am the sole director of this company. the company has not started trading yet so i am not taking any salary from the company. Now my questions are

1- If a Director is not taking salary then are there any legal problems with company house or HMRC? i mean is there any legal requirement for a director to be employed by the company?
2- Whether a non salaried Director is required to file nil return?
3- If a Company has only one director on its payroll and that director is taking salary below NI threshold then should the company get registered as PAYE with HMRC.
4- If a Director is taking salary which is below minimum threshold of NI then should the director get registered with HMRC and also file annual return.

Will appreciate your detailed replies

Thanks

Detailed replies cost money and sorry, I've got a business to run. So have you, come to that , so perhaps learning how would be a good start? To answer the immediate question, Directors don't have to take a salary. If you do, you will need to be registered for PAYE. Perhaps a first step would be to hire an accountant before you get in a real mess.


There's a guide over on the right on this page, There's another, slightly wider one to be found at www.pcg.org.uk Read them both, plus having a wander through the nightmare that is www.hmrc.gov.uk, then ask questions.

[Crossideas]

Hi,

I have incorporated a limited company and i am the sole director of this company. the company has not started trading yet so i am not taking any salary from the company. Now my questions are

1- If a Director is not taking salary then are there any legal problems with company house or HMRC? i mean is there any legal requirement for a director to be employed by the company?
2- Whether a non salaried Director is required to file nil return?
3- If a Company has only one director on its payroll and that director is taking salary below NI threshold then should the company get registered as PAYE with HMRC.
4- If a Director is taking salary which is below minimum threshold of NI then should the director get registered with HMRC and also file annual return.

Will appreciate your detailed replies

Thanks