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Where Taxpayers and Advisers Meet

NI contributions for a director leaving a company.

DJ314159
Posts:54
Joined:Wed Aug 06, 2008 3:34 pm
NI contributions for a director leaving a company.

Postby DJ314159 » Mon Nov 16, 2020 1:42 pm

Say a director of a Ltd company has been paying themselves a wage at the Secondary Threshold of £732 per month on the 6th of every month, and their leaving date is 18th December, which means they will have been paid 9 times this financial year but worked slightly less than 9 months. Would the pro-rata calculation done when this director leaves mean that they incur some NI liability? Been looking this one up and cannot find an example of the relevant calculation. Many thanks for any help.

robbob
Posts:3100
Joined:Wed Aug 06, 2008 4:01 pm

Re: NI contributions for a director leaving a company.

Postby robbob » Mon Nov 16, 2020 2:07 pm

Would the pro-rata calculation done when this director leaves mean that they incur some NI liability?
Existing directors start with a full annual amount - there is no pro rata reduction to reduce annual primary/secondary threshold if they leave before the end of the year

You would only need an adjustment if you have been using alternative method (ie using normal employees tables) and paying NI when final YTD figures confirm none is due - in that case you simply adjust all the NI charged back out if amounts come in below annual trheshold.


https://www.gov.uk/employee-directors

DJ314159
Posts:54
Joined:Wed Aug 06, 2008 3:34 pm

Re: NI contributions for a director leaving a company.

Postby DJ314159 » Mon Nov 16, 2020 2:13 pm

Thanks for your reply. Very helpful.


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