How do I set up an existing director
mid-year?
In the Employee's Record card there is a
'Director?' tick box. When you tick the box, the following
question is asked: "Enter the tax week number that this person was
made a director".
You must enter the tax week number that the employee was
appointed a director. Even for monthly paid directors you should
still enter the week number. This will set the start point for the
director's pro-rata year. If the employee should have been a
Director from a previous period an NI adjustment will need to be
carried out - please contact your support center for
assistance.
What do I do when an employee is no
longer a director?
Do nothing! The rules state that when a director finishes or
ceases to become a director they should continue to pay NI in the
same way until the end of the year. If the employee pays more NI
during the year than the annual limits, they could be entitled to a
refund. They are responsible for claiming this back from
HMRC.
Why is my director not paying any
NI?
Remember, if you flag someone as a director from the start of the
Tax Year they will be subject to annual earnings limits. This
means they will not pay any NI until they earn over the current
Annual Earnings Threshold. Once they reach this they will pay NI on
all of their NIable earnings until they reach the Annual Upper
Earnings Limit. From April 2003 Directors will also have to pay an
extra % on earnings above the Upper Earnings Limit, whereas before
contributions would stop at this point.
