Directors and PAYE

• Directors are employees.
• Directors are not entitled to National living/minimum wage.
• Directors usually register for Self-assessment (SA). They will need to complete employment pages of the return.
• Two methods for computing National Insurance Contributions (NICs) for directors:
a) Cummulative ; or
b) Regular employee method

Please note both method give similar results at the end of the tax year.
• Directors can register for `Annual Scheme` who are paid on an annual basis to avoid sending (Employee Payment Summary) EPSs every month.
• Dividends can only be paid when there are sufficient profits made in the business.
• NIC is not due on Dividends.
• Record keeping: PAYE records needs to be kept for 3 years.
• Its advisable to keep records for 7 years.

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