Director also Consultant

Director also Consultant

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I've seen Limited company accounts prepared by other firms of accountants where the company pays the Director or Directors consultancy fees. There is a note in the accounts stating that these transactions are at an arms length basis etc.

This seems to me to go against most tax law.

I wondered if others had come across it. Whether it is/was prevalent in any specific industry sectors.

Also whether anyone has had an HMRC enquiry in such a situation and how it went.

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By zebaa
27th Aug 2011 10:32

Case by case

You have to look at each on a case-by-case basis. It is easier where the director is self-employed already and undertaking that for which they are claiming consultant ( and therefore self-employed ) status. Refresh your knowledge and be prepared to argue your case.

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By Euan MacLennan
28th Aug 2011 09:35

Agreed

Two other factors that will indicate employment as a director, rather than self-employment as a consultant, are where the director is undertaking the work for which purpose the company was formed and where the director is the only person working for the company.

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By mumpin
28th Aug 2011 10:59

Thanks...

Thanks for that, guys.

Much appreciated.

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