Can a non-UK resident become a Director of Limited Company and receive a salary through PAYE

[Mike77]

I am UK citizen and the sole director of a limited company that has no employees other than myself and conducts its business solely in the UK. My wife is an EU citizen and has no right to live in the UK. I would like my wife to become a Director of the company and to pay her the same salary as I take (£12,570) through PAYE as she assists me in the running of business (both when she is in the UK and remotely in the EU) and has also contributed to the funding of the business through my Directors loans.

My question is, can I do this and if so, how?

My understanding is that because my wife is no right to live in the UK, she will not be able to get a NI number and therefore employment, but I’ve also read that EU citizens can work in the UK during the permitted visa free stay of 6 months in every 12 months so I’m a bit confused. I’m also unsure whether being a Director of a Limited company influences this if at all.

Thank you for your time.

[AGoodman]

Yes she can be a director and can work and be paid. You would need to operate PAYE. As a non-resident, she would not be liable for income tax for work carried out outside the UK.

Whether she can do any of this work while she is in the UK is an immigration question that I am not qualified to answer. You should get proper advice as breaching the rules could have serious consequences. I should add that it is illegal to provide immigration advice without being a regulated lawyer or registered adviser.

[Mike77]

Many thanks for taking the time to reply and your comments.

I have continued reading on the subject myself. I now understand that she would have no right to work in the UK even on the six month visitor visa unless she applies for a work visa, which I don't think she would qualify for. That said, all the work can be carried out remotely in the EU so this hopefully avoids the immigration issues you raised.

My key question now is how I can obtain a NI number for her in order that I can pay her through PAYE, given that she has no right to work in the UK, albeit that she won't actually be in the UK. I have read that there is something called a Section 690 direction to operate PAYE on a non-resident employee's earnings for work in the UK. I suppose the confusion with all of this is around the issue of remote working, given that all of the company business is in the UK but she can do all of her work without stepping foot in the UK.

Thanks again.

[AGoodman]

I'm afraid PAYE is a mystery to me. It should be possible though. She would be run through PAYE under an NT code.

Also bear in mind you need to check whether your company has any responsibilities vis a vis her country of residence

[bd6759]

She won’t need an NI number if she is not working in the UK.

[Mike77]

Again, thanks to you both for the comments.

If my wife becomes a director, ideally, I would also like to claim the employment allowance for the company. We would satisfy the eligibility criteria with both being employees earning above the secondary threshold, but because my wife would have a NT tax code, would this make the company ineligible?

Also, would the NT tax code need to be formalised with HMRC in any way (ie a form submission or evidence provided) or just entered into the Basic PAYE Tools when I next run a payroll?

Thanks.

[bd6759]

No. The company would not be eligible for EA because your wife will not be liable to primary NIC.