Virtual remuneration

29 May 2012

Issue: 4355 / Categories: Forum & Feedback

Can a director who is working abroad through his personal limited company and who is not resident in the UK vote himself several years’ worth of remuneration so it is received net while he is outside of the UK tax?

I was interested in the replies to the query Desert dividend. I have a client in a similar situation. He is working overseas in full-time employment for his own company and will be abroad for at least the whole of 2012/13 if not longer.

HMRC appear to have agreed that this is a full-time employment abroad.

While in the UK before this overseas assignment he worked through his own limited company which had built up quite substantial reserves and my client envisages that on his eventual return to the UK he will continue to work through his company.

On the basis that his remuneration while abroad will be free from UK income tax and after the first 52 weeks National Insurance contributions I am wondering whether he could vote himself director’s remuneration in excess of the annual company earnings ...

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