Managing director that doesn't take a wage - is it a job?
Discussion
So if you were a managing director of a company your were growing and didn't take a wage from is that technically a job?
If you have no need to take a wage from the company and would rather keep the money in the business to grow. You might take some dividends. Is this technically a job?
You might put 40 hours a week into running the business.
I'm looking at some finance for a machine and the possibility of using the RGF to fund some of it. I will be creating a job but the finance house say I will also be safeguarding my own as MD?
If you have no need to take a wage from the company and would rather keep the money in the business to grow. You might take some dividends. Is this technically a job?
You might put 40 hours a week into running the business.
I'm looking at some finance for a machine and the possibility of using the RGF to fund some of it. I will be creating a job but the finance house say I will also be safeguarding my own as MD?
I'm applying for RGF funding and the form asks will i be safe guarding a job?
I will be creating one new job as a result of the machine purchase but the finance house has suggested i will also be safeguarding another job (the MD - me).
It is technically correct i suppose but i do not have a PAYE wage?
I will be creating one new job as a result of the machine purchase but the finance house has suggested i will also be safeguarding another job (the MD - me).
It is technically correct i suppose but i do not have a PAYE wage?
Garage19 said:
I'm applying for RGF funding and the form asks will i be safe guarding a job?
I will be creating one new job as a result of the machine purchase but the finance house has suggested i will also be safeguarding another job (the MD - me).
It is technically correct i suppose but i do not have a PAYE wage?
Stop over thinking - its a job and your safeguarding it, just done the same thing.I will be creating one new job as a result of the machine purchase but the finance house has suggested i will also be safeguarding another job (the MD - me).
It is technically correct i suppose but i do not have a PAYE wage?
fesuvious said:
Although, if he works 40 hours a week, and declares it he is certainly employed under minimum wage!
I was 'warned' about this @10 years ago. I now only say it 'tongue in cheek'. However at the time I was encouraged absolutely to ensure I paid myself minimum wage PAYE for @40 hours a week 'just in case'.
Company directors are exempt from minimum wage rules....I was 'warned' about this @10 years ago. I now only say it 'tongue in cheek'. However at the time I was encouraged absolutely to ensure I paid myself minimum wage PAYE for @40 hours a week 'just in case'.
https://www.gov.uk/national-minimum-wage/who-gets-...
Garage19 said:
If you have no need to take a wage from the company
I think it would be reasonable to use the finance company's justification that the investment is safeguarding your job.By the way, you might want to take advice on whether it would be worth you taking a nominal salary to ensure you reach the minimum salary to ensure your time spent working to build the company is classified as a 'qualifying year' in terms of your National Insurance contributions.
At this salary level (circa £5700 per year), you won't be paying NI or income tax.
However, it will mean that each year of work will contribute to your state pension.
Taking all income via dividends but not getting a qualified year might be an expensive mistake in the future.
Just a thought.
EddieSteadyGo said:
I think it would be reasonable to use the finance company's justification that the investment is safeguarding your job.
By the way, you might want to take advice on whether it would be worth you taking a nominal salary to ensure you reach the minimum salary to ensure your time spent working to build the company is classified as a 'qualifying year' in terms of your National Insurance contributions.
At this salary level (circa £5700 per year), you won't be paying NI or income tax.
However, it will mean that each year of work will contribute to your state pension.
Taking all income via dividends but not getting a qualified year might be an expensive mistake in the future.
Just a thought.
Worth doing... And worth paying a nominal amount of NI too.By the way, you might want to take advice on whether it would be worth you taking a nominal salary to ensure you reach the minimum salary to ensure your time spent working to build the company is classified as a 'qualifying year' in terms of your National Insurance contributions.
At this salary level (circa £5700 per year), you won't be paying NI or income tax.
However, it will mean that each year of work will contribute to your state pension.
Taking all income via dividends but not getting a qualified year might be an expensive mistake in the future.
Just a thought.
Make sure you take into account any other income you have though.... Property rental income, bank interest, etc etc... Orherwise you can trip over the threshold.
Edit just to add... The allowance before tax is going up every year, and I think is up to £10k for 2014-15
Dr Interceptor said:
Worth doing... And worth paying a nominal amount of NI too.
I'm not accountant, but my understanding is that provided your salary is above the 'lower earnings limit' for the year, it is classed as a 'qualifying year' and so contributes to your state pension.Paying yourself a higher salary and paying NI, doesn't affect your state pension entitlement.
I have just googled it and the 'lower earings limit' is currently £5772/annum.
Thought it was worth highlighting to the OP in case he wasn't paying himself any salary at all.
But the original question is referring to grant funding.
If I was looking at the application and you are safe guarding a job then that is great.
I would then look at the role it was safeguarding.
How much would this applicant loose or be worse off if I refused the grant?
What is the implication if the safeguarded job was lost????
That is what I would consider when applying.
If I was looking at the application and you are safe guarding a job then that is great.
I would then look at the role it was safeguarding.
How much would this applicant loose or be worse off if I refused the grant?
What is the implication if the safeguarded job was lost????
That is what I would consider when applying.
The tax allowance for most indivduals for 2014/15 is £10,000. It is increasing to £10,600 in 2015/16.
The salary level up to which an individual can be paid before any NI is payable is currently £7,956.
Don't forget that it is worth putting some salary through a set of company accounts because salary counts as a business expense and is therefore deductible when arriving at the profit on which the Corporation Tax liability will be calculated.
A dividend payment is NOT a business expense. It is a distribution of profits, and is therefore NOT used to reduce the profit for Corporation Tax purposes. So even processing a salary of £7,956 will save a company £1,591.20 in Corporation Tax with no added liability for PAYE or NI.
I would argue that, if a director is actually managing, running and "directing" a business, at least SOME of the income they derive from the company MUST be in respect of carrying out these tasks and should be treated as salary.
The salary level up to which an individual can be paid before any NI is payable is currently £7,956.
Don't forget that it is worth putting some salary through a set of company accounts because salary counts as a business expense and is therefore deductible when arriving at the profit on which the Corporation Tax liability will be calculated.
A dividend payment is NOT a business expense. It is a distribution of profits, and is therefore NOT used to reduce the profit for Corporation Tax purposes. So even processing a salary of £7,956 will save a company £1,591.20 in Corporation Tax with no added liability for PAYE or NI.
I would argue that, if a director is actually managing, running and "directing" a business, at least SOME of the income they derive from the company MUST be in respect of carrying out these tasks and should be treated as salary.
Eric Mc said:
The tax allowance for most indivduals for 2014/15 is £10,000. It is increasing to £10,600 in 2015/16.
The salary level up to which an individual can be paid before any NI is payable is currently £7,956.
Don't forget that it is worth putting some salary through a set of company accounts because salary counts as a business expense and is therefore deductible when arriving at the profit on which the Corporation Tax liability will be calculated.
A dividend payment is NOT a business expense. It is a distribution of profits, and is therefore NOT used to reduce the profit for Corporation Tax purposes. So even processing a salary of £7,956 will save a company £1,591.20 in Corporation Tax with no added liability for PAYE or NI.
I would argue that, if a director is actually managing, running and "directing" a business, at least SOME of the income they derive from the company MUST be in respect of carrying out these tasks and should be treated as salary.
Great adviceThe salary level up to which an individual can be paid before any NI is payable is currently £7,956.
Don't forget that it is worth putting some salary through a set of company accounts because salary counts as a business expense and is therefore deductible when arriving at the profit on which the Corporation Tax liability will be calculated.
A dividend payment is NOT a business expense. It is a distribution of profits, and is therefore NOT used to reduce the profit for Corporation Tax purposes. So even processing a salary of £7,956 will save a company £1,591.20 in Corporation Tax with no added liability for PAYE or NI.
I would argue that, if a director is actually managing, running and "directing" a business, at least SOME of the income they derive from the company MUST be in respect of carrying out these tasks and should be treated as salary.
What's the problem with safeguarding 2 jobs rather than 1? I don't know much about the RGF, but I'd assume if they were some sort of charitable funding entity, then safeguarding UK jobs would be a part of their mission and therefore safeguarding more jobs is better. May have got the wrong end of the stick though.
AyBee said:
What's the problem with safeguarding 2 jobs rather than 1? I don't know much about the RGF, but I'd assume if they were some sort of charitable funding entity, then safeguarding UK jobs would be a part of their mission and therefore safeguarding more jobs is better. May have got the wrong end of the stick though.
The E(uropean)GF is worse, you need a racially diverse employment policy and actively try to recruit disabled people (near enough) - no PG though so that's ok.When I set my business up in the 80's I didn't take awage for months, no point in putting money in as shares to pay income tax when I took it out. SO I just lived on savings, hardest job I ever had> I was investigated by the tax office for no income (Norway) and requested to increase share capital and pay tax on earnings, as not paying taxes was unfair, I told them to **** off.
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