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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4360
Experience:  FCCA FCMA CGMA ACIS
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I HAVE A PVT LIMITED COMPANY REGD IN ENGLAND. I AM THE SOLE

Customer Question

I HAVE A PVT LIMITED COMPANY REGD IN ENGLAND. I AM THE SOLE DIRECTOR AND ONLY EMPLOYEE IN IT. I AM TAKING COSTS AND WORK RELATED EXPENSES FROM THE COMPANY ACCOUNT
RIGHT NOW I AM FILING MY SELF ASSESSMENT AS WELL AS COMPANY ANNUAL RETURNS.
DO I HAVE TO REGISTER AS AN EMPLOYER WITH HMRC FOR PAYE TAXES AND DO THE REAL TIME FILINGS. IS IT MANDATORY?
THANKS
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

A director of a company is an employee per se and should be paid under PAYE arrangements. If the company is paying wages to the director then it should register with HMRC as an employer and operate PAYE, undertaking the appropriate real time filings.

However, if the sole moneys being paid out represent repayment for items bought in on the company's business, eg stationery, postage, travel etc then these do not, of course, go through PAYE. It is only fees, salaries, wages etc which need this treatment. I am aware of two private companies where directors only draw out sums expended on the companys' behalf, and neither are registered as an employer at this stage. Conversely I know of two other companies who do reimburse expenses and pay director's wages also and PAYE is operated for the latter only.

Reimbursed expenses are outside the scope of tax and do not need declaring on a self assessment return.

I do hope I have been able to be of some help to you in this matter.