Paying a person of significant control?

MTJR

Can anyone help me with this?

If a company has 2 directors and one is removed as a director but remains a PSC person of significant control. Can they invoice the company for work they have done?
The company puts on small music festivals and he’s done stage management work which he needs paying for.

Thanks

MTJR

I’m guessing because he still has control of the business it wouldn’t be allowable, but just want to make sure

phoenixd

Yes, they can. Anyone, even current and previous owners, can invoice a company for services provied.

MTJR

I didn’t think an owner/director could invoice their own company?
The director would have to be self employed and offering those services to other clients too though, is that correct?

phoenixd

Yes, they can invoice their own company. What they then do with the payment received is their business. Obviously, they may need to declare it for self assessment purposes, but that has nothing to do with you (the company's accountant or bookeeper) unless you also do directors' returns. Typically, you are not responsible for what company's service providers do with their income. If you are worried about the implications of IR35 because you are certain that this person only provides services to the company in question, that's a different ballgame. If this is a one-off situation, it should be okay to pay that invoice. The alternative is placing them on payroll.