Ltd Company - 2nd director liabilities

[milkybarkid99]

Hi

Just about to hit the enter button on my Ltd company set up and want to know what tax implications my other half will have as she is a non-working director of the company (she has a full time job elsewhere)

She is also the company secretary and I do not plan to pay her a salary as a director, maybe as a cosec.

The main reason for this is for banking as my credit rating is slightly adverse and I want her as a partner/director of the company so we can create a bank account with less hassle.

Just dont want her to end up being more liable for tax etc due to this?

Can anyone enlighten?

Cheers

Sean

[Davey78]

If you don't pay her, which you're not obliged to unless you give her a service contract as a director or an employment contract as the company secretary, then she won't pay any tax.

If you choose to pay her, she'll pay tax and NI (and you'll have to pay employer's NI) on this, in whatever band she falls into when adding this pay onto her current income.

If you make her a shareholder and pay dividends, tax will be liable on any money she receives in this way (at different rates to regular income and no NI is due) and the amount of tax on the dividends will depend on whether she falls above or below the higher rate tax band (which, I believe, is currently just under 40,000).

If you simply list her as a director and company secretary, without any pay, dividends or benefits in kind, she will not pay any additional tax to what she is already paying in her other job.

[milkybarkid99]

Thanks Davey much appreciated.

The intention is not to pay her so should be ok.

Cheers again

Sean

[THEPUMA]

If she is a director, she will have to submit a personal tax return.