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HMRC internal manual

Business Income Manual

Specific receipts: fees: directors’ fees received by partnerships and companies

ESC A37 allows directors’ fees to be included in the computation of the trading profits of professional partnerships rather than being taxed as the employment income of the director. There is a similar concession relating to fees received by a company with a right to appoint a director to the board of another company. For the text of ESCA37, see EIM02500. For guidance on ESC A37, see EIM02501. The National Insurance Contributions treatment is discussed in NIM12004 and NIM12005.

A request to apply ESC A37 should be dealt with by the person responsible for examining the partnership’s return and accounts.

For the tax treatment of other professional remuneration from offices or employments, see BIM40355.