Article
5 things directors need to know
As a director, we understand you're busy. We want to keep it brief, but we want to make sure you know what you need to so we’ve condensed this information into five points
By Catherine Heinen, FCCAThese points cover the most important things directors should know. Read this list to make sure you’re on track, whether you’re a new or experienced director.
1. Directors' responsibilities
Know your responsibilities; authorities can fine, prosecute and disqualify you if you fail to meet them.
- Running the company
- Keep company records
- File accounts and tax return annually
- Pay taxes
- Confirmation statement filed annually
- Report changes to Companies House
2. Directors' duties
Be aware of your duties, these are a guide to what being a company director should involve:
- Follow company rules as set out in articles of association
- Act in bets interests of the company
- Don’t allow other people to control your actions
- Avoid conflicts of interest
- Don’t accept benefits from a third party
- Tell other directors and members if you might personally benefit from a transaction
- Don’t misuse company’s property
- Be confidential about the company’s affairs
3. Profit extraction
As a director you can take money out of a company as a salary, expense claim or benefit. Directors should not take drawings in the same way that a sole trader can. A director, who is also a shareholder, can receive a dividend.
Taking money from a company that is neither salary or dividend is a directors’ loan. Complex rules are in place for directors’ loans and it’s important to speak to your accountant if you have a directors’ loan.
4. Company register details
Public and private registers record director and shareholder details, these include:
- Name
- Nationality
- Occupation
- Month and year of your date of birth (private register)
- Correspondence/service address (public register)
- Home/residential address (private register)
Speak to your accountant about using a service address to protect your personal information.
5. Self-assessment obligations
Directors don't need to register for self-assessment or file a tax return unless they have other reasons to do so. Directors who have untaxed earnings, and/or taxable income above £100,000 may need to register for self-assessment. The deadline for self-assessment registration is 5th October after the end of the tax year. Speak to an accountant to make sure you meet your commitments.
How TaxAssist Accountants can help
TaxAssist Accountants are here to help you and your business thrive. We specialise in accounts and tax for limited companies and directors. Give TaxAssist Accountants a call today on ::telephone or use our contact form and we'll be in touch.
Frequently Asked Questions
Directors can receive bonuses and these are often annual and tied to performance. Like a salary, bonuses are subject to income tax and National Insurance Contributions where applicable.
Director's pay is influenced by the circumstances of the director, and the company in terms of other earnings and the cash flow of the company. Choosing between salary, bonus and dividends is covered in more detail in our Guide To Directors’ Pay.
Date published 11 Dec 2023
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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