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No. The logic doesn't follow.I reiterate the point that a prorietary director is effectively a self employed person, and that is why they quite rightly don't get a PAYE tax credit.
No. The logic doesn't follow.
What difference does it make if the director is self employed?
(Forget about pensions for the moment, there are a huge number of directors who can't afford any kind of pension)
@mandelbrot:
A director is considered "properietary" and denied the PAYE credit if he owns 15% or more of the shares in the company.
At that level of shareholding, he could still be Class A PRSI and treated as an employee for those purposes.
Under company law, he would have little power in the ultimate control of the company with only 15% of the shares.
So I don't believe it is accurate to describe a director who is denied the PAYE credit as "effectively self-employed".
I can only talk about my personal experience with proprietary directors. I spent 7 years in accountancy practice, during which time I dealt with well in excess of 100 client companies. I cannot remember a single instance where I encountered a proprietary director who owned over 15% of the share capital, but did not exercise any control.
I now have a different job, and it regularly involves looking at company directors and their relationships with their companies, and again I'm genuinely struggling to recall a situation such as you describe (at a conservative estimate, I've looked at another maybe couple of hundred companies).
I reckon that the number of people who fall into this category (not actually exercising control, but denied a PAYE credit) is miniscule.
Sorry, I'm totally stumped by this argument. A person has no business being a company director if they are not in a position to exercise some level of control over the company and its affairs. This applies regardless of whatever status they may have as a shareholder. On the other hand, there are executives out there whose personality dominates their company yet they mightn't necessarily own 15% of their employer company. Did Sean Fitzpatrick own 15% of Anglo?
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