Directors Pay in the UK

The payment of directors in the UK is quite vast that entails tremendous planning to avoid infringement of the principles as set by the HMRC. In limited company directors pay can be divided into wages, dividends and some other perks and privileges like pension contributions, cars, health and other insurances among others. All these elements have different tax treatments hence the need to find the right balance. One way this is achieved is where the directors of companies are paid wages slightly above NIS threshold while most of their emoluments come in form of fees for their stocks. This method also has effect of lowering National Insurance burdens and income tax since dividends are taxed less. But dividend is not allowed as an expense to reduce corporation tax that is corporations have to pay the corporate tax even if they distribute dividends. Directors have to also have regard to other benefits like pension contributions, which are highly effective from a tax perspective for personal savings during one’s working career and after retirement. Furthermore, any cost incurred through the management of the business for instance mobile phone expenses or traveling expense can be incurred by the business and hence less the tax burden. At Account-Ease, we have the expertise of giving advice to the directors pay in the UK on how they can design their pay packages in a way that would suit their preferential budget and the needs of the business. Here we take the time to share information regarding legal aspects of tax saving opportunities that would allow directors achieve their income targets and at the same time, abide with the rules set down by HMRC. We offer consultation on matters such as salary and dividend planning so directors keep more of their hard earned cash and tax efficient pension contributions and other services.