Additional company director: Get the details right

 

Jennifer Adams explains why you should have an induction, what comprises a programme and advice on the contents of the induction pack when a new company director joins the team.

The vast majority of companies registered with Companies House started life as one-director companies and will remain so until the demise of either the director or the company itself.

When such a director does invite another to join, the role of the company’s accountant is to advise where necessary, mindful of the duty of care required not least in advising the parties involved of their legal responsibilities.

Many company directors have no understanding as to what being a director actually entails or of the consequences of getting it wrong. Educating newly appointed directors in such matters was the reasoning behind the main principle of section B4 of the UK Corporate Governance Code 2010 which states that “All directors should receive induction on joining the Board and should regularly update and refresh their skills and knowledge.” The Code was written for listed companies but the idea of an “induction” is valid for the smaller non-listed company even those with only one or two directors. An accountant can help in the induction process as he will invariably have the background knowledge required both of the history of the company and of company law.

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  • Why have an induction
  • What comprises a programme
  • The induction pack

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Comments

SA01

staceyl | | Permalink

The directors should also be informed that they need to register for self assessment!

Should they?    1 thanks

justsotax | | Permalink

I don't think there is any legal requirement for a director to complete an SA return - unless they fall within the requirements re income (or untaxed sources etc)

JAADAMS's picture

Re self assessment - see previous article on this

JAADAMS | | Permalink

This was covered in my article of about 6 weeks ago - 27th June as per link below -

http://www.accountingweb.co.uk/article/p11d-season-get-details-right/528807 

The text states:  

Any office holder (to include non-executive directors) should be subject to PAYE whatever the amount of income received (even £NIL)

I was thinking that whether he was registered or not would be something that he would be asked verbally rather than something to put in an 'induction pack' and if he was working for the company then it would already be known but yes, at some time it should be confirmed.

Yes they should

staceyl | | Permalink

Yes they should

If you can find me the legislation

justsotax | | Permalink

that states that a director of a company must complete a tax return then I will quite happily accept your stance.  

 

 

Read the P11D article

EOAKS | | Permalink

>>

As the P11D article states...

ITEPA 2003 s 5 which states that ‘ the provisions of ... employment income ... that are expressed to apply to employments apply equally to offices unless otherwise states’ 

>>> it doesnt say you have to complete a Tax return - just that you need to register for self assessment.

This is a topic that comes up time after time on 'Any Answers' and has been dealt with in the P11D article.

 

@Eoaks

justsotax | | Permalink

perhaps i have missed the point....registering for SA is as far as i can make out effectively requesting to have a tax return issued...?!!?  (the big give away being on page 2 of the SA1 - 'why do you need to complete a tax return?', followed by the various options).

 

That's not legislation    1 thanks

Roland195 | | Permalink

This is simply HMRC's take on the subject. They are not yet able to create law on their own although they are of course a law onto themselves which is another story.

 

 

 

Like I said Stacey    1 thanks

justsotax | | Permalink

Show me the legislation and I will quite happily accept your response. But let's be clear as roland195 points out, the revenues view is exactly that...their view...not legislation.

daveforbes's picture

directors and SA    1 thanks

daveforbes | | Permalink