Can one company invoice another company if they have directors in common?

N

Nutso

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Hi All,

Can a director of Company A issue an invoice for payment to Company B (of which he is also a director) and pay all PAYE in Company A?

Thanks,
Nutso
 
Nutso said:
Hi All,

Can a director of Company A issue an invoice for payment to Company B (of which he is also a director) and pay all PAYE in Company A?

Thanks,
Nutso
Click to expand...

This is my question - I was trying to make my title shorter but I can see how it would cause confusion. I don't seem to be able to edit the title though.
 
Nutso said:
This is my question - I was trying to make my title shorter but I can see how it would cause confusion. I don't seem to be able to edit the title though.
Click to expand...

Have a read of this (emphasis on paragraphs 4&5) and if you still have questions come back...
[broken link removed]
 
Thanks Mandelbrot, I appreciate it. I was having difficulty finding anything when I was searching online.

From my reading of it, it seems that work relating to company B should be paid as PAYE income in Company B and if it is not paid in this manner, Company B are still liable to PAYE/USC etc on the amount.

Have I got that right?
 
Another way of looking at it is that there is nothing stopping company A invoicing company B for services provided in the normal course of business. Any related party transaction has to be disclosed in the accounts
 
@Nutso not sure I am folllwing this. I think what you are saying is that X is a Director in A Ltd. and is a Director in B Ltd. There is no indication here as to what the relationship with A Ltd and B Ltd is.

Is the Invoice for X is in relation to his services as a Director in B Ltd and that A Ltd want to issue an invoice for that?

The normal practice is that PAYE / PRSI is paid on Directors emoluments so that would be B Ltd. However, why would X want it all through A Ltd v B Ltd? Is he a 15%+ shareholder in either?

You may have to share a bit more to get a better answer.
 
X is a director in A Ltd and in B Ltd. He is a 100% shareholder in A Ltd and a 50% shareholder in B Ltd.

There is no relationship between A Ltd and B Ltd apart from a director in common. There have been loans issued from A Ltd to B Ltd in the past which have been repaid.

The invoice for X from A Ltd to B Ltd would be for works done on behalf of B Ltd. A Ltd is a prosperous company in its own right and not purely set up for the purposes of transferring money from B Ltd.

X would prefer to hold funds in A Ltd and take a salary from A Ltd, paying corporation tax on the balance, rather than paying money from B Ltd as salary. Is this possible? Or do you require further information?
 
Perhaps the nub of the matter is whether the work done on behalf of B Ltd. is specifically related to X's role as a company director or is in the normal activity of A Ltd.

If it is the latter then A Ltd could invoice B Ltd, bearing in mind the requirement to disclose in your accounts. The regulations referenced in previous posts might come in to play if A Ltd was clearly being paid for X's role as a Director of B Ltd.

You should get professional advise related to your specifics

Regards
numbercruncher
 
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