The taxation of company directors is often misunderstood, misrepresented or (wrongly) manipulated and therefore always sits high on HMRC's PAYE  "hit-list" for all employers. Our article here explains some of the common problem areas.

Employers who fail to properly address the taxability of director payments, including Non Executive Directors who also fall within the PAYE legislation, or who try to "box clever" by trying to get round the tax rules with convoluted arrangements, are asking for trouble in our opinion in relation to PAYE compliance.

The best advice for all employers is: take advice, know what the tax laws are around directors and by all means do things tax efficiently but stay within the confines of the law. Evidence shows that employers who do not heed this advice often have settlements to make to HMRC in relation to incorrectly taxed director payments on conclusion of a PAYE audit, often with hefty penalties thrown in where the director/business has blatantly flouted the law.

 

What support can Optimum PAYE provide ?

  • Advise on Directors Service Agreements/ Contracts of Employment and all contractual payments
  • Review and advise on current payment arrangements for directors, including salary, benefits and expenses
  • Non Executive Director review covering fees and expense payments and also Permanent Workplace issues
  • Prepare or review forms P11D for each director at tax year-end (see also support with end of year tax compliance)
  • Review and advise on director's loan accounts for smaller businesses
  • Knowledge sharing sessions with director groups within the business
  • One-to-one sessions with directors to discuss and advise on their individual situation
  • Annual "healthcheck" type exercise to ensure continued compliance with director payments and benefits
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