Form 11, prop. director employed elsewhere

[diggerbarnes]

Hi all,

I realise it's a little late to be asking this, but here goes anyway. My wife and I are both proprietory directors in a company with a 50-50 share split. I'm the sole employee of the company with my wife employed elsewhere as a regular PAYE worker.

We're trying to complete her form 11, but are confused as to what she needs to complete in section B (income from trades, professions or vocations). What does she need to complete in this section - and should any figures entered there from the company accounts be considered her subsidiary trade?

We've elected for separate assessment as a married couple hence the requirement to both make returns.

As a more general question - beyond the normal legislative overhead, are there substantive penalties in leaving her as a proprietary director e.g. entitlement to state maternity etc. (I realise this is a wide-ranging question.)

Of course, all this should be handled by an accountant, but various circumstances mean that for this period we have to handle this ourselves.

Thanks!

 

[Eithneangela]

From experience, and from the assumption that this is a small company with perhaps no prospect or intention of it getting much larger, and therefore probably without the funding to pay for the services of a Financial Advisor (is that an oxymoron?) or an Accountant, for simplisity's sake, can I advise:

1) Take your wife off the company director list. If she is not active in the company and it's a small company with only the two of you as directors, then it's better not to have her there. There may be regulatory rules which will impact your wife's earnings depending on the performance and tax-compliance of the company.
2) Opt for seperate assessment - your wife needs to protect her PAYE income and related tax from activities in the company and it also makes it much cleaner and easier to return your income tax forms.

Regards

 

[diggerbarnes]

Thanks for the advice.

Re: 1 - Yes, given the chance again we wouldn't have made her a prop. director because of the extra hassle it's entailed. We'll switch it to a single member company shortly.

Re: 2 - I was under the impression that whether you opted for joint or separate assessment the tax bill worked out the same (as opposed to separate treatment). That said, we opted for the separate assessment a while back.

 

[mathepac]

...
Re: 1 - Yes, given the chance again we wouldn't have made her a prop. director because of the extra hassle it's entailed. We'll switch it to a single member company shortly...

Don't get confused between "member " and "director"; a single member company (a solitary shareholder / owner) still needs a minimum of two directors under current legislation, AFAIK.

The options in your wife's case are :

• Reduce her share-holding below 15%; she can remain as a director but will not be classed as a proprietary director. You will need advice here as there may be stamp-duty payable and perhaps other tax implications
• Have her remain as a 50% share-holder, but resign as a director. In this case you will need another director.

 

[diggerbarnes]

Yes, she'll remain as a director but I'll purchase her shares from her. I don't think there will be stamp duty implications based on what I've read but I will double check that with a relevant professional beforehand. Thanks.

 

[patftrears]

Yes, she'll remain as a director but I'll purchase her shares from her. I don't think there will be stamp duty implications based on what I've read but I will double check that with a relevant professional beforehand. Thanks.

Might be easier for you to buy more shares from the company to reduce her %.
If you both have 1 share you just issues 8 more to yourself to bring her holding below 15%.
She can't claim the paye tax credit