Directors Fees

Do I need a director’s fee in my company if I am captured by IR35?
No - as you can potentially utilise your personal allowance to offset against income taxed at source when paid by your agency into your company.
Do I need a director’s fee in my company if my company is dormant whilst I work through an umbrella company?
No - as you can potentially utilise your personal allowance to offset against income taxed at source by the umbrella company paying you.
What director’s fees do you recommend as a sole director if I am outside IR35?
It is recommended that the Directors Fee is to be set at the 2021/22 annual Employers NI threshold of £8,840 for sole directors. This equates to £170 per week or £736 per month.
What director’s fees do you recommend as a director with additional employees if I am outside IR35?
It is recommended that the Directors Fee is set at the 2021/22 Personal Tax threshold of £12,570. This equates to £241 per week or £1,047.50 per month.
What are the thresholds for the 2020/2021 Financial Year for Directors Fees?
If you are a sole director, we recommend that your Directors Fee is set at the 2021/22 annual Employers NI threshold of £8,840 p.a. which equates to £736 a month / £170 a week.
How is my National Insurance affected if I set a Directors Fee lower than the recommendation?
If you set a Directors Fee below £120 per week and do not have any other income subject to National Insurance, this may affect your eligibility for future benefits.

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