Another directorship

A client is taking up some non-executive directorships and has been told that colleagues already in that situation receive some of their rewards under PAYE – those for their duties as a director – but receive the bulk as consultancy fees.

These are paid without the deduction of tax either as a sole trader or via a personal service company.

I appreciate that it would be sensible to prepare a formal minuted agreement at the time of appointment specifying the fees for both director’s duties and for the consultancy work.

Presumably there should also be separate contracts for the two different functions?

Do readers consider that HMRC could validly challenge this arrangement?

Query 17 458 – Nonex

Reply from New Road

Nonex asks if HMRC could validly challenge the arrangement. Of course they can challenge but the question is will the challenge be successful? The answer to that question...