Hi there,
As part of an informal agreement between myself and an employee I’m wanting to reward the individual with a large sum of money (six figures). As the employee is not a director (or associated to the business in any other way other than an employee), I cannot simply pay a company dividend.
At the moment the only possible route I can see is offering it as a bonus, however the taxation on such a large sum of money will probably be c. 40% (income tax & NI).
Are there any alternative solutions here that don’t break laws, and that HMRC would approve of?
A left field solution would be for the employee to registered a LTD business and invoice my company, or would that be frowned upon by HMRC?
Any assistance is greatly appreciated! Whilst I am seeking advice from other sources (accountants), I wanted to see what the community here has to offer