6 Tips for Directors
6 Quick Tax Tips for Directors
- National Insurance contributions for company directors is calculated on an annual basis. A director can earn £5,435 (08/09) before either the director or the company is liable to pay any NI.
- If a director leaves an employment where NI has been calculated in the normal way, a NI rebate may well be due.
- If the Company owes money to the directors it can be paid back without any tax being due as it is classed as the repayment of a loan. There also the option of having this money repaid in prior to a salary being paid or in advance or dividend payments. ø
- Directors have to pay tax on 'Benefits in Kind' no matter how high or low their earnings. The £8,500 lower limit does not apply to directors.
- If the Directors owe money to the company, repayment should be made within 9 months of the year end; otherwise tax will be due on the benefit of the loan.
- Company Cars can significantly reduce your tax allowances and leave you with a lot less money in your pocket. The Fixed Profit Car Scheme lets your employer pay you to run your own car. The rate per mile is 40p for the first 10,000 miles and 25p per mile thereafter.
