p11d and registration for paye

bob22
bob22 Registered Posts: 9 Regular contributor ⭐ ? ⭐
Hi,


Client: Ltd company started in Jan 2010. One director and only shareholder. Is also self employed with a completely separate business. Profits from self-employment use up his personal allowance. For his company he just takes dividends, no salary, therefore not registered for paye. However the company pays for his business travel and subscriptions(all allowable for tax). If a p11d dispensation is applied for does his company need to register as an employer and submit nil returns for this tax year? Or can the company just submit a dispensation without registering for paye? Does he need to submit p11d at all?

Any thoughts?

Thanks

Comments

  • sdv
    sdv Registered Posts: 585
    bob22 wrote: »
    Hi,


    ......Is also self employed with a completely separate business. Profits from self-employment use up his personal allowance.

    For his company he just takes dividends, no salary, therefore not registered for paye.

    However the company pays for his business travel and subscriptions(all allowable for tax).

    If the director is NOT an employee of a company you can not submit a P11D for a director. You can only send P11D for those employed by the company. If your director has a contract of emploment and he is paid £0, the company may be in breach of minimum pay regulations.

    If the company is paying for his travel and subscription, he should invoice the company for those expenses.

    He can account for that NIL income in his own return to the revenue.

    I presume that you are the company's bookkeeper. I would advise you to speak to the company's accountants, who will have excess to Trolls tax books or specialist services. They will be in a better position to advice on this issue.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    I have had 2 answers to this question, one was to register for PAYE and apply for a dispensation from submitting a P11d and do nil returns.

    The other was to just ignore it - that was by an ex revenue inspector who said it would be a useless exercise, as long as the expenses were non taxable anyway.

    Take your pick?

    @SDV I may be wrong but I thought that directors were exempt from the minimum pay regulations
  • deanshepherd
    deanshepherd Registered Posts: 1,809
    My thoughts:

    Bluewednesday has outlined your 2 options. I would be inclined to go for the first as it that is the 'correct' way. HMRC are getting more and more desperate for money so if they can eek out a few extra penalties for non-compliance then I suspect they will.

    Directors are exempt from NMW provided they do not have an employment contract.

    @SDV The Director IS an employee of the company and should not be invoicing for expenses.
  • Bluewednesday
    Bluewednesday Registered Posts: 1,624
    Dean

    Those were my thoughts too although it does seem such a waste of effort and time to do so. However better to be correct than not!

    I was quite surprised that a Revenue officer (admittedly ex though) who used to train about payroll year end should suggest ignoring it!
  • bob22
    bob22 Registered Posts: 9 Regular contributor ⭐ ? ⭐
    Thanks for all your thoughts. (even on a bank holiday weekend!)
    I think option 1 is the best. The 'correct' way. The director tried to keep things
    simple by just taking dividends but keeping things simple and Ltd company don't go together.
  • sdv
    sdv Registered Posts: 585

    @SDV I may be wrong but I thought that directors were exempt from the minimum pay regulations


    Thanks for the information.

    I was not aware that the directors were exempt from MPR. That now explains why one of the directors (the company I work for) is taking enough pay from his company to just contribute National Insurance.

    My thoughts:

    Directors are exempt from NMW provided they do not have an employment contract.

    @SDV The Director IS an employee of the company and should not be invoicing for expenses.


    Thank for the information on directors and correcting me on the director's status.


    Contribution by both of you is very helpful.
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