director's minimum wage

[mbsc]

Hi ,I would like to double check when to register as an employer .In hmrc says that if I pay to a director 442 pounds per month I do not need to register as employer and maintain any records, however if I pay to a Director (myself) 560 for 2011 then I need to keep records,Does it mean just internal records or I need to register for payroll obtain PAYE even if I am still using my P Allowance.and the income is not taxable or subject to NIC.
Thanks

 

[elaine@cheapaccounting]

You register for PAYE when you pay at / above the LEL

 

[elaine@cheapaccounting]

LEL is £102 / week - BTW

So when you pay £589 to a director (tax and NI free) you register as an employer plus complete employer annual returns

You do this so as to get NI credits

 

[MyAccountantOnline]

Hi ,I would like to double check when to register as an employer .In hmrc says that if I pay to a director 442 pounds per month I do not need to register as employer and maintain any records, however if I pay to a Director (myself) 560 for 2011 then I need to keep records,Does it mean just internal records or I need to register for payroll obtain PAYE even if I am still using my P Allowance.and the income is not taxable or subject to NIC.
Thanks

This link to the HMRC website explains when you must register as an employer - http://www.hmrc.gov.uk/paye/intro/register.htm#1

Its not necessarily just based on what salary you have as you'll see.

 

[elaine@cheapaccounting]

however if I pay to a Director (myself) 560 for 2011

A salary of £560 / month = £6720 / year = £129.24 / week is above the LEL and so you would need to register as an employer

from here:

http://www.hmrc.gov.uk/paye/intro/basics.htm

Employers' responsibility for PAYE

As an employer you have a legal obligation to operate PAYE on the payments you make to your employees if their earnings reach the National Insurance Lower Earnings Limit (LEL). For the tax year 2011-12 this is £102 a week, £442 a month or £5,304 a year.

 

[DeanCo]

Some more info here: Directors Salary & Dividends