Can a director invoice the company?

stefanboro
stefanboro Registered Posts: 187 Dedicated contributor 🦉
I am reading conficting opinions on this matter.

Can a director invoice the company he is appointed to either by another limited company or as a sole trader?

I know that it is possible but dependant upon circumstances. I am just not sure what circumstances in particular, whether it is done via a company or director as a sole trader makes a difference and whether or not a contract should be in place between the director and the company for this arrangement.

Any guidance is always massively appreciated.

Stefan.

Comments

  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Broadly speaking yes, if it is unrelated to the trade of the company or the directorship. Usually, no a director can't. Typically, any invoices raised will either be from an unconnected business, or in a consultancy role that's nto directly related to the trade. Yes, I would put a contract in place and a meeting minute to cover your bases.

    Let me give an example:

    Director of Ltd Co that runs a computer repair shop, and the director is also a repair technician.
    He cannot invoice the company as a sole trader for:

    His time manning the shop
    His time repairing computers
    Anything to do with running the business or being a director.

    Let's say he is also a solicitor. He could invoice for legal consultancy, for example.

    This is proving to be a bit of a crap example, sorry :lol: Partially because I've never really found a true example where a director can legitimately invoice his company as a self employed person, as it happens very rarely.

    Does that help a little?
  • stefanboro
    stefanboro Registered Posts: 187 Dedicated contributor 🦉
    That helps immensely. Thank you.

    PS - Loving your twitter pics, particularly what I assume is a charity run pic haha :thumbup1:
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    stefanboro wrote: »
    PS - Loving your twitter pics, particularly what I assume is a charity run pic haha :thumbup1:

    Stalker..!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Good :)

    PS I have no idea what you mean -_-
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Here's another example..

    I'm an accountant. Let's say me and my wife also run a cafe. My accountancy business operates the payroll for the cafe on the same terms as any other client of mine and I bill accordingly. No problem.

    If the terms are different because of my connection then it is not acceptable to invoice as a sole-trader.

    If the director is being remunerated as a 'consultant' with their own service company then you have all the usual IR35 questions to contend with. Best avoided in my opinion unless this is perhaps a business angel type non-executive director.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Stalker..!

    Pot kettle?
  • mc25
    mc25 Registered Posts: 232 Dedicated contributor 🦉
    Dean thats a very good example and kinda explains it all.
  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
    Monsoon wrote: »
    Pot kettle?

    Hahaha.. it's true. You're my screensaver!
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
    Hahaha.. it's true. You're my screensaver!
    ]That is truly terrifying :001_unsure:
  • stefanboro
    stefanboro Registered Posts: 187 Dedicated contributor 🦉
    Hahaha.. it's true. You're my screensaver!

    Moving on....... :rolleyes:
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