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NICs on 2 jobs for a director

NICs on 2 jobs for a director

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Hi all,

I have a question that I can't seem to find the answer on, so thought I'd ask here.

I know that in the case of 2 jobs that aren't caught under the aggregation rule, both are NICable individually - i.e. if you earn £8,632 per year in each, there will be no NIC on either. However, how does that change (if at all) if for one of those jobs, you're a director, and therefore taxable on an annual basis?

For example, Mr X is in full time employment, earning £20k. He also has a limited company for which he is sole shareholder and director (he is a director for the full tax year). If he earns £8,632 from his limited company in 2019/20 tax year, will he pay any NICs? If not, by my calculations it's still beneficial to process this salary (unless there was insufficient cash in the limited company to actually pay this, which would mean that the director would be worse off from a cash flow perspective until the salary was actually paid).

There will be tax at 20%, but that's in contrast to 19% CT, and then 7.5% tax on dividends (over dividend allowance).

Am I right here, or is the NIC situation different on this second job when you're a director?

Thanks

Oliver

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18th Apr 2019 08:59

Being a director does not change the separate NIC treatment.

I'm not convinced you thought the tax side of things through properly though.

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By Matrix
18th Apr 2019 10:12

Yes he would get the NI allowance. Just bear in mind that, if there are losses which can’t be used, then he has paid tax at 20% with no deduction in the company. Maybe just put it through in month 12 if the profitability is currently uncertain.

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