How do I set up an existing director mid-year?
In the Employee's Record card there is a 'Director?' tick box.
When you tick the box, the following question is asked:
"Enter the tax week number that this person was made a
director"
You must enter the tax WEEK number that the employee was
appointed a director. Even for monthly paid directors you should
still enter the week number. This will set the start point for the
director's pro-rata year.
If the employee should have been a Director from a previous
period an NI adjustment will need to be carried out - please
contact Support
for assistance or call 0844 815 5671.
What do I do when an employee is no longer a director?
Nothing!
The rules state that when a director finishes or ceases to
become a director, no refunds are given and the director is then
treated like a normal employee. If the employee pays more NI during
the year than the annual limits, they could be entitled to a
refund.
Why is my director not paying any NI?
Remember, if you flag someone as a director from the start of
the Tax Year they will be subject to annual earnings limits.
This means they will not pay any NI until they earn over the
current Annual Earnings Threshold. Once they reach this they will
pay NI on all of their NIable earnings until they reach the Annual
Upper Earnings Limit.
From April 2003 Directors will also have to pay an extra % on
earnings above the Upper Earnings Limit, whereas before
contributions would stop at this point.