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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
A Director of a limited company is an employee per se and must be remunerated through PAYE channels. Pretty simple, the company will raise a P46, HMRC will issue a tax code and tax and NI will be deducted as appropriate. Just check that the tax code issued is correct.
As a shareholder the only other tax liability would be Income Tax (IT) on dividends over 5K in any one tax year and a latent liability to Capital Gains Tax (CGT) on any gain above your Annual Exempt Amount (AEA), currently 11.1K, made on ultimate sale of your shareholding.
I do hope that you have found my reply of assistance.
Thank you for your support.
No, just a possible CGT wobble if the proportions are changed after you have invested when you come to sell eventually and make a gain over the AEA. However, the tax is not onerous as you would almost certainly be entitled to Entrepreneurs Relief which limits CGT to a 10% flat rate instead of the usual 18% or 28% or a combination of the two rates depending on your income including the gain in the year of disposal. Confused, you will be!
Delighted to have been of assistance.
Well I wouldn't say that. There is a thriving market in second hand companies; you can even sell them on eBay! I am aware of a company which cost its owners two quid in shares which sold as a shell for 500 quid.
Thank you for your bonus.