Can a director invoice the company, instead of going through PAYE?

Discussion in 'Askaboutbusiness' started by mirmick, Oct 14, 2011.

  1. mirmick

    mirmick Frequent Poster

    Can a director of Ltd company invoice to company for his/her services instead of getting salaries? Does it matter if director is also share holder or not?

    Would appreciate response.
  2. Gekko

    Gekko Frequent Poster

    No - Payments should be dealt with through the PAYE system.
  3. sean.c

    sean.c Frequent Poster

    This post has further information:

    AFAIK, directors fees are only acceptable if the director does not have a contract of employment and only for those duties as a director (e.g. attending agms I suppose). I might well be wrong even then.

    If you're trying to dodge PAYE, tough... :) I'd had the same thought....
  4. T McGibney

    T McGibney Frequent Poster

    You would be on very dangerous ground trying to argue that one at a Revenue or ODCE audit.

    As regards the thread you linked, I would disagree profoundly with the following statement:

    "I thought all directors are independant of co - if he is non-exc director. No deduction as he is not ee - consultant - therefore he should organise his own tax"
  5. sean.c

    sean.c Frequent Poster

    I agree, for what it's worth. If the OP wants to try that one one, good luck to him.
  6. capnhand

    capnhand Frequent Poster


    Sect 185 Companies Act 1963 prohibits the making of tax free payments to directors;

    185.—(1) It shall not be lawful for a company to pay a director remuneration (whether as director or otherwise) free of income tax or of income tax and sur-tax or of sur-tax, or otherwise calculated by reference to or varying with the amount of his income tax or his income tax and sur-tax or his sur-tax, or to or with the rate of income tax or sur-tax except under a contract which was in force on the 31st day of March, 1962, and provides expressly, and not by reference to the articles, for payment of remuneration as aforesaid.

    (2) Any provision contained in a company's articles or in any contract other than such a contract as aforesaid, or in any resolution of a company or a company's directors, for payment to a director of remuneration as aforesaid shall have effect as if it provided for payment, as a gross sum subject to income tax and sur-tax, of the net sum for which it actually provides.

    (3) This section shall not apply to remuneration due before the operative date or in respect of a period before the operative date.