In a recent set of accounts I've produced for a CIC the directors are adamant that fees paid to them as self-employed consultants should not be shown as directors remuneration. Another accountant has told them they don't need to show any directors remuneration in this case.
From the model articles that most CICs use it has a section on directors remuneration saying all salaries or fees paid to directors should be shown and reported in the CIC34 form or the accounts.
I usually put Director's Fees for Services if they are invoicing their company as self employed or remuneration if they are receiving a salary.
As previously discussed there is also an issue if the self employed work the directors do is exclusive to their own CIC.
Am I right in thinking that all payments made to directors acting in any capacity should be shown as directors remuneration?
I have the same queries - very confused, if a director provide service to their CIC as a self-employed contract will that be declared as a director remuneration? in this occasion, director receive payment against invoice produce from his/her self-trading business to the CIC in which a Director involved. How this payments will be declared?
On the otherhand is their any legal matter, if Director just simply receive payments through PAYE from the CIC? On the other if Director invoicing their company as self employed or remuneration if they are receiving a salary how they can declare their income? My understanding is director any income from their CIC need to be declare as a remuneration. I don't know is their other way round? If a Director have self employed business, that is obviously open for everyone to use his/her service, how it can be exclusive only for their own CIC.
I would suggest you speak to your accountant, the basic issue of proving the self employed payment needs to be handled by someone who is certain.
What other legal matters are you thinking about? All the information is on the HMRC website if you want to understand it, Heidi Harris is a CIC herself and an accountant if you want to contact her http://cicassoc.ning.com/profile/HeidiHarris
Hi There, I have been also been majorly confused - our accountant has raised this as a concern, as some Directors have been on PAYE as they have also been undertaking Senior Youth Worker roles where we have had staff shortage.
Where another Directors has invoiced due to being self employed - as they were providing consultancy to get us set up as a CIC.
From an initial phone call with the Accountant she seemed to be suggestion everything should have also been in Directors Renumeration ??? I have made an appointment with our accountant 7th June, so will post again after.
This may be of interest http://www.accountingweb.co.uk/topic/financial-reporting/overcome-y...
and is in line with my advice elsewhere on the split of the money paid to Directors - that you need to distinguish between money paid for the holding of the office of Director and money paid for the provision of services supplied by the same individual as the Director. Basically - we are discussing two different payments for different services, albeit to the same individual.
Having said that, if your Mem & Arts overrides this and requires dislosure of all amounts so paid then this would be the deciding factor.