Why Company Directors are Considered Employees

[karg_g]

Hi Guys,

I know most of you have been worried on issues why UKBA treats directors as Self-Employed but for HRMC purpose directors are considered as employees. Well here is a link and the wordings that shows from HRMC point of view and hence directors are employees effectively meaning directors are liable to only Class 1 NIC contributions and not Class 4 (i.e) (Not self employed)

What is a company director liable for?
For NI purposes, a company director is classified as an
office holder.
Under Section 2(1) of the Social Security Contributions
and Benefits Act 1992, (In Northern Ireland,
Section 2(1) of the Social Security Contributions and
Benefits (Northern Ireland) Act 1992) an office holder
is liable for Class 1 NICs provided the earnings received
from that office are chargeable to Income Tax as
employment income.

Please go to Page 5, Section 4: http://www.hmrc.gov.uk/nitables/ca44.pdf


Apologies if you guys knew this before