Directors are legally responsible for running the company and making sure company accounts and reports are done properly.Directors are classed as employees, and their earnings are subject to National Insurance. They pay NI on annual income from salary and bonuses over £8,060, which means that the Director will not start to pay NI until they make £8,060. For more information about paying director’s NI, see National Insurance for Company Directors.
To add a company director
- Add an employee or select an existing employee.
- In the Tax & National Insurance section, enter a date for when the employee became a director.
- For the date, select the effective date this person was appointed as the company director. The NICs will be calculated on the Annualised method for Directors from the Appointment Date. At this time, we do not support the Alternative Method.
- Save your changes.
To remove a company director
If a director is leaving the company, follow the same steps as you would for a regular leaver.Make sure you prepare a P45 and give a copy to the employee. After you’ve paid the employee for the last time, tell HMRC by deleting the Director’s NIC calculation method entry in the FPS. Deduct any NI the director owes from their last payment.
If the director is staying on as a regular employee:
- Go to Employees.
- Select the employee.
- In the Tax & National Insurance tab, do not enter a director start date.
The employee will continue to pay NI as a director until the end of the current tax year (6 April).