New Ltd-should I name partner as a director?

[hunkydory]

Hi all.

My partner will be working in this business two days a week and will be earning a wage below €16k. Are we better off not having her as a director? Is this more tax efficient? Would we be better off with as her on employee PRSI?

 

[mandelbrot]

Hi all.

My partner will be working in this business two days a week and will be earning a wage below €16k. Are we better off not having her as a director? Is this more tax efficient? Would we be better off with as her on employee PRSI?

Whether or not she is a director of the company is not necessarily relevant to determining the correct class of PRSI. You might want to ring the SCOPE section of Dept of Social Protection, to confirm the position.

Whether or not she is a director is irrelevant if she doesn't have any shareholding, from a tax point of view. As long as she owns <15% of the share capital, she would not be regarded as a proprietary director, and therefore be classed as an ordinary employee for tax purposes, and entitled to a PAYE tax credit.

However, if you and your partner are regarded as a cohabiting couple, then it may well be the case that for PRSI purposes she is insurable under Class S, even though she may not actually own shares in the company, and regardless of whether or not she is a named director.

 

[NumbrCrunchr]

Whether or not she is a director is irrelevant if she doesn't have any shareholding, from a tax point of view. As long as she owns <15% of the share capital, she would not be regarded as a proprietary director, and therefore be classed as an ordinary employee for tax purposes, and entitled to a PAYE tax credit.

On this point, Revenue refused to give the PAYE tax credit to a spouse of a client where he was a proprietary director even though she had no shareholding. Have you experience of them allowing this credit in this situation? Perhaps inconsistency from Revenue
Regards
Numbercruncher

 

[mandelbrot]

On this point, Revenue refused to give the PAYE tax credit to a spouse of a client where he was a proprietary director even though she had no shareholding. Have you experience of them allowing this credit in this situation? Perhaps inconsistency from Revenue
Regards
Numbercruncher

You gave me a fright for a second! I was just about to apologise for giving misinformation but then I realised the OP isn't married, he's talking about a partner, rather than a spouse.

The tax legislation doesn't recognise anything but the sealed deal...!

You are of course correct in relation to the restriction of PAYE credit to spouses, so no inconsistency there I'm afraid.