How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask bigduckontax Your Own Question

bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3621
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

Can you show me a quick example of directors pay and ni say

Customer Question

Can you show me a quick example of directors pay and ni say if they get paid £2000 a month in there salary and then a 10000 dividend this will be for next tax year so include the new dividend first £5000. I am interested in the Ni for directors because apparently this is different but I can't see how ? Will they also need to opt into thepension scheme as the are employees ?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. I am as equally confused with NI for directors! I agree with you that when all the chips are down the answer is a lemon. However for directors. contributions are worked out from their annual earnings rather than from what they earn in each pay period. This is the reason for the different method. Whenever I have paid directors I have always used the normal PAYE process and HMRC have never batted an eyelid! In fact, in this case as the payments are regular at 2K a month the PAYE tables will work and give you the correct deductions to make. Here is the Gov UK guidance for directors on regular emoluments: 'This method is common for directors who are paid regularly. Each time you pay a director, work out their National Insurance only on their pay for that period, including bonuses.' The dividend does not come into the NI computation. Dividends in 16/17 et seq will be taxed as follows [source JF Financial; Accountants]: 'Your first £5,000 of dividends will be tax free. Any dividends above that but still in the basic tax band (up to £43,000 for 16/17) will be charged at 7.5% and any dividends in the higher tax band will be charged at 32.5% (also additional rates apply at the upper rate of tax).' Your employer will not know your personal tax position [I do appreciate that in this instance they well might] so will deduct tax at 7.5% and it will all come out in the wash when you self assess at the conclusion of each tax year. In most organizations there is automatic enrollment in the pension fund and an individual must opt out if he so wishes. If the director elects to opt in then everyone will know where they stand with no necessity to make assumptions. I do hope that I have been able to shed some light on your conundrum.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3621
Experience: FCCA FCMA CGMA ACIS
bigduckontax and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Thank you Keith I appreciate the house honesty as when I read the HMRC literature I seriously wonder if anyone else get this but there you go ! Love keeping up with all the changes too.
I guess you are right if I just go ahead and do what I needed to paye then I should be able to see at the end of the year the difference not great when trying to explain to people !
Expert:  bigduckontax replied 1 year ago.

I always used PAYE for directors and the normal monthly basis and there was never any adjustment needed at the end of the year.

Please be so kind as to rate me before you leave the Just Answer site.

Expert:  bigduckontax replied 1 year ago.
Thank you fro your support.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.co.uk/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.co.uk/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.co.uk/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.co.uk/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.co.uk/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions