Paying my University Fees from my own company
I am the director and sole shareholder of a limited company. I operate this way because of the idiosyncrasy of my clients. I design software. At the moment, my only income are dividends from the company and, possibly, for this year I will commence as an employee with a very low salary and the rest of my income will be dividend.
I am reading for a PhD in Mathematics which is directly related to the activity of my company. I am enrolled as a part time student. The algorithms and knowledge developed are directly used by the company.
I am trying to find the best way to reflect the connection between company/studies/director and my doubts are:
If the company pays for the fees:
- For the company would be an expense and not taxable in corporate taxes but;
- Is it considered training and development of the director on the benefit of the company? As per http://www.legislation.gov.uk/ukpga/1988/1/section/588/enacted. and not be considered benefit in kind...
- could it be considered a benefit in kind for me as director? Although the research directly improves the position of the company in the market and makes it more competitive with better technology and offer.
- If so; would I have to pay tax and NIC over the amount of the fees? and, I understand this tax would be differently treated from the dividends obtained.
- If I pay the fees.
- The fees will not deducted the taxable amount for the company
- I, as director and getting the fees as dividend, pay the corresponding taxes on the fees but no NIC
I believe the best way is the company to pay the fees and that there is reasonable doubt as per transferring the taxation into the director in the founds of benefit in kind, being finally a company expense and not flowing any further but I am not expert.
I have been trying to find information regarding this but not very successfully. I don't think is a scholarship case and the information at http://www.hmrc.gov.uk/manuals/eimanual/eim30001.htm does not apply. (I cannot find the EIM06203 anywhere anyway)
Please, could someone advise?
Many thanks in advance.
- Enquiry into tax return - how co-operative would you be? 312 6
- Share premium or Directors Loan 725 30
- VAT reconciliation and VAT return on Sage 102 3
- Goodwill gesture for providing work 421 12
- What would you do in this situation? 116 5
- Filing a P87 (professional fees) before year end. 128 2
- Recommendations for payroll/AE software? 600 13
- More HMRC on gov.uk 627 11
- Rollover relief - when does gain crystallise in this situation? 79 1
- Offshore company transferring assets to a UK individual. 339 14
- Interest Free Loan - Salay Sacrifice? 240 4
- Research and development - repayment timescale 216 5
- Sole trader hid directorships. 383 6
- Halloween - do you celebrate it? 1,392 46
- NOVA 549 1
- Clearing payments on account/ Sage 50 271 10
- Regional Development Grant 117 4
- Problem ex client...again.. 2,397 21
- Company car without a salary 229 2
- Charity donations 1,081 21
- Bonus Bonds 390
- Insolvency and whistle blowing 377
- Transfer of funds into recently set up company 288
- TPR imposes first penalty notice fines 257
- Box 8 VAT Return - deposit payment 186
- Husband proposes to buy the car as Director unable to acess finance 175
- Finance Lease 155
- Company Car Lease 152
- Form 42 147
- Demerger Reserve 129