The UK tax treatment of both of non-executive directors (‘NEDs’) and non-UK resident directors is an area that companies frequently get wrong.
Often these directors are paid ‘gross’ by a company on the basis that they are providing their services to that company through their own personal service company where these should still be subject to PAYE and NIC in the same way as executive directors and employees.
In recent years we have seen HMRC increase scrutiny in the area of directors’ remuneration, with a task force dedicated to the pursuit of underpayments of PAYE and NIC and occasionally issuing costly penalties where companies fail to comply.
In this article, we summarise the key areas of interest for both the individual directors and the company and the benefits of taking early action to ensure HMRC compliance.
September 28, 2017
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