Director's NIC

Director's NIC

Didn't find your answer?

Director getting confused with the Director's NIC calculation.

How do you explain how this works in very simple terms. I've tried but still can't get the director to see it clearly.
Peter Watkin

Replies (4)

Please login or register to join the discussion.

avatar
By AnonymousUser
28th Apr 2006 20:24

Slowly
I usually explain that for Directors NI works like tax (cummulative) so it doesn't matter when you pay yourself during the year you still get done for the same amount. That is the price for potentially being a naughty boy in HMRC's eyes.

Thanks (0)
avatar
By User deleted
03rd May 2006 12:08

Annual Average
In legal term, while employee (non director) have their NI calculated on weekly/monthly basis and hence can be timed to take advance of the 1% rate band, director's NI liability is cauclated based on average annual bonus,salary,in kind divide by 52 (or 12).

Thanks (0)
avatar
By User deleted
03rd May 2006 12:09

Annual Average
In legal term, while employee (non director) have their NI calculated on weekly/monthly basis and hence can be timed to take advance of the 1% rate band, director's NI liability is cauclated based total annual bonus,salary,in kind divide by 52 (or 12) and hence disallow the 1% band loophole.

Thanks (0)
By robguy
12th May 2006 11:30

Simple ...yet difficult
The annual earnings/allowance for Director NIC seems such a simple point to understand. But as a note i have tried to explain it to two 'new' directors. Neither could really understand & follow it's implications, & both complained when the 'higher NIC' kicked in.

I am forever amazed that senior people who move upto director level offten can't grasp such simple accounting/tax issues.

Thanks (0)