Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Director's remuneration

JodieRJodieR Experienced MentorRegistered Posts: 1,002
If someone's been employed by a company on a normal 'market rate' salary for a few years and is then appointed as a director but receives no additional remuneration (and still does their same regular job), do you still need to declare their salary as 'director's remuneration' in the accounts?

Comments

  • hunterhousehunterhouse Settling In Nicely Registered Posts: 17
    Jodie,

    You may need to delve into the particular circumstances a little more but in the meantime wish to consider the following:

    Q. When is a director not a director?

    A. When they are not an officer of the company.

    Good luck.

    H
  • jamesm96jamesm96 Experienced Mentor Registered Posts: 523
    I guess even if his day to day tasks haven't changed, he's still now legally a director which confers added responsibilities on him and changes his role from being an employee of the company, to being an officer or agent of the shareholders as hunterhouse mentions, in which case I'd be inclined to reanalyse his pay to Dir's remuneration as you say.

    If it's just a small company, though, it doesn't make too much difference really - it won't affect the tax and only the Abbreviated accounts will be filed at Companies House so nobody will see it anyway.
  • deanshepherddeanshepherd Font Of All Knowledge Registered Posts: 1,809
    To reiterate what hunterhouse has alluded to:

    Is he a director in the sense he has been made an officer of the company, or has he been given a snazzy job title to make him seem more important (e.g. Director of Marketing Operations).

    Yes for the former, no for the latter.
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    To reiterate what hunterhouse has alluded to:

    Is he a director in the sense he has been made an officer of the company, or has he been given a snazzy job title to make him seem more important (e.g. Director of Marketing Operations).

    Yes for the former, no for the latter.

    Stupid question, but whats the best way to check this?
  • jamesm96jamesm96 Experienced Mentor Registered Posts: 523
    PGM wrote: »
    Stupid question, but whats the best way to check this?

    Companies House WebCheck. If you click 'Order information on this company' then you should see a list of any recent appointments.
  • hunterhousehunterhouse Settling In Nicely Registered Posts: 17
    PGM,

    Eventually Companies House will need to be informed of the appointment of a director but if this is pending then it is a sufficiently significant event to show in the minutes. The quickest way would be to ask the client...then ask again - to ensure their understanding of the situation is the same as your own.

    H
  • PGMPGM Font Of All Knowledge Registered Posts: 1,954
    jamesm96 wrote: »
    Companies House WebCheck. If you click 'Order information on this company' then you should see a list of any recent appointments.

    Thanks, I've just tried that and they are all in there :)
  • JodieRJodieR Experienced Mentor Registered Posts: 1,002
    Thanks everyone. The director in question is an actual director registered with Co House. It's the same company i was asking about before - they're not-for -profit so have no shareholders. She's been the office manager since the beginning and was made a director when the previous director left as it made sense for her to be able to sign things off etc but it is a voluntary role so I can see why she doesn't think it's anyone's business to know her salary.
    The company is now registered as a charity so (after the hoops have been jumped through) there's no requirement to send corp tax return with full accounts to HMRC - I'll maybe have to check with charities commission to see if they require it on their copy.

    And (thanks to KenS's reccomendation) I use Duedil now to check to see appointments & terminations of directors - it's simple to use and free too :)
  • jamesm96jamesm96 Experienced Mentor Registered Posts: 523
    JodieR wrote: »
    And (thanks to KenS's reccomendation) I use Duedil now to check to see appointments & terminations of directors - it's simple to use and free too :)

    I've never seen this before... that's awesome!
Sign In or Register to comment.