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Directors earnings

15/05/2019 06:39:17
Hi

Could you please clarify this for me?

On page 7 of CA44 National Insurance for company directors, it says

'If the director has:
• an annual earnings period, do not record the earnings details for NICs purposes until the director’s
total earnings for the tax year reach or exceed the annual LEL
• a pro rata annual earnings period, do not record the earnings details for NICs purposes until the
total earnings paid to the director since the date of appointment reach or exceed the pro rata annual LEL '

Does that mean if directors are paid less than LEL currently at 6144 a year, then it does not need to go through PAYROLL ?

Thanks.
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Re:Directors earnings

15/05/2019 08:36:31
Hi

You still need to put the director's earnings through the payroll and report them on an FPS each time they are paid. However, you would only report the earnings as taxable pay, until the director's earnings exceeded the annual LEL/pro rata annual LEL. Once they have exceeded the LEL you would report the total earnings as both taxable pay and earnings for NIC.

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Directors earnings

15/05/2019 14:09:53
thanks.
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Directors earnings

21/05/2019 07:03:11
What is the Director's start date for PAYE purposes. Is it the first date they were paid any salary?
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Directors earnings

21/05/2019 07:03:11
Do Directors have to be offered auto-enrolment in a pension, even if they then formally say "no thanks".
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Re:Directors earnings

21/05/2019 13:35:24
I will reply to each of your questions separately. My answer regarding the start date assumes that you have not previously notified HMRC of a start date and you have received no salary, benefits or expenses since becoming a director.

1 - You can use either the date you became an employee (director) of the company or the date you started to receive salary. However, either could cause a problem depending on other factors i.e.

a - If you haven't needed to complete Self-Assessment returns since becoming a director, HMRC might assume our records are incomplete if you use the date you became a director or

b - If you start to receive salary part way through the tax year, you payroll software might not calculate NIC correctly if you are using the annual basis.

It is therefore probably best to use a workaround and enter 6 April of the tax year that you start to receive salary.
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Re:Directors earnings

21/05/2019 14:26:30
2 - There are a number of factors which determine whether you need to offer enrolment into a workplace pension to a director. There is information on the Pensions Regulator website and you may find this link to frequently asked questions useful

Auto enrolment - Directors
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Directors earnings

21/05/2019 14:29:29
If it is a one-man company it is OK to email the Pension Regulator and say that the director doesn't want to auto-enrol. If there are other directors/employees they have to auto-enrol and then opt out.
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Re:Directors earnings

24/05/2019 10:58:01
Hi

If you follow the links in the guidance I provided in my earlier reply, this will lead you to a link to an online form that needs to be completed for the Pensions Regulator. It would not be sufficient to merely send an email as it might not give all of the information required. However, if the director does not receive any salary or expenses/benefits and has not requested a PAYE scheme, it won't be necessary to send anything to the Pensions Regulator until a scheme is required and set up.



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