NI contribution for director of company who will be employed from other company

BernaO

Hi everbody
Payroll is not my strong subject. I really need any advice.
My client is a director of the company and on payroll to tale salary from his own company. Now he is offered job from other company. When he start another company but He still want to continue his own ltd company as well. So should I do which following way or any other way I can do:
1) His salary is £12000 annually. He should keep his salary the same and also he will be on payroll for second job. We cannot issue P45 so He needs to complete P46 from his new employer and tax code for his own company will be remain 1275L and new employer must be tax code BR for him. So on payroll for his own company I must need to aggregated his earning from new company or both company needs to do own record. So end of the tax year we will aggregated his income from both company.
2) Second option we needs to keep his director salary on part time level so again P46 issues for him.
3) Third option we need to issues P45 for him and not taking his salary from own company but it will be result more CT tax for him.
Please advise me about how own company must to do his payroll and how second company must to do his payroll.
Many thanks in advance. and any advice is appreciated.

Caspar1

In these instances, tax advice is needed for him personally and for his company, as usually the Director is on the payroll of his Ltd company to achieve National Insurance credits for their old age pension and receive some tax free income whilst reducing corporation tax, taking the rest as dividends.

You can certainly keep him on his own Ltd Company payroll but on £12k odd, he will have no tax allowance left when he is on the other employers payroll and they will indeed need a P46 (statement C I have another job), and will be on BR code with no tax allowance to utilise if he is using all his allowance on his own company payroll.

(You don't have to keep him on his own company payroll, but this would be something to look at from his personal and company tax planning point of view). After considering the full financial and tax position, should you decide he doesn't need to remain on his own company payroll, you would give a P45 to the new employer of the other company.

If he remains on both payrolls at year end, he will have a P60 from his own company for the £12k or so he is on, and also a P60 from the other employed company, and his 'aggregated income' as you put it, is entered as 2 forms of employment on his self assessment.

BernaO

Caspar1 said:

In these instances, tax advice is needed for him personally and for his company, as usually the Director is on the payroll of his Ltd company to achieve National Insurance credits for their old age pension and receive some tax free income whilst reducing corporation tax, taking the rest as dividends.

You can certainly keep him on his own Ltd Company payroll but on £12k odd, he will have no tax allowance left when he is on the other employers payroll and they will indeed need a P46 (statement C I have another job), and will be on BR code with no tax allowance to utilise if he is using all his allowance on his own company payroll.

(You don't have to keep him on his own company payroll, but this would be something to look at from his personal and company tax planning point of view). After considering the full financial and tax position, should you decide he doesn't need to remain on his own company payroll, you would give a P45 to the new employer of the other company.

If he remains on both payrolls at year end, he will have a P60 from his own company for the £12k or so he is on, and also a P60 from the other employed company, and his 'aggregated income' as you put it, is entered as 2 forms of employment on his self assessment.

Thank you very much Caspar1. It is very clear and easy to understand for me. Many thanks again...

Jagz1234

See if his earnings from other employment are at the LEL, if they are he receives the state pension foot print in the year so no need to worry about state pension issues.

Step 2 earnings for nic are per job and not aggregated for all employment unlike income tax. Obviously need to take into account annual maximum nic rules.

If job one uses his PA then make him an unpaid director of his company, pay him with dividends. Make sure he remains a director to take advantage of ER if he liquidates or sells the company.