Directors Fees

Adding a second shareholder is straightforward, but may create issues you should be aware of. If the procedure is not carried out correctly, HMRC may deem the appointment of a second shareholder as ‘income shifting’. This means transferring some of the taxable profits you have made to another individual with less tax liability, thereby reducing your own tax liability.

If you set a director’s fee below £123 per week for 2023/24 and do not have any other income subject to National Insurance, this may affect your eligibility for future benefits.

If you are a sole director, we recommend that your Director’s Fee is set at the 2022/23 annual Employee’s NI threshold of £11,908 p.a. which equates to £992.33 a month / £229 a week.

It is your choice what level of director’s fee you wish to set for the 2023/24 tax year. If you set your director’s fee at the personal allowance threshold, this equates to £241.73 per week or £1,047.50 per month.

It is your choice what level of directors’ fee you wish to set for the 2023/24 tax year. If you set your director’s fee at the personal allowance threshold of £12,570, this equates to £241.73 per week or £1,047.50 per month. Or you can consider setting your directors fee at £9,100 ( the Employer’s National Insurance threshold).

No - as you can potentially utilise your personal allowance to offset against income taxed at source by the umbrella company paying you.

No - as you can potentially utilise your personal allowance to offset against income taxed at source when paid by your agency into your company.