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HMRC internal manual

Employment Status Manual

Particular occupations: nominee directors - coding and assessability to tax

Where the Inspector dealing with the accounts of the company receiving the director’s fees considers they are assessable on the company in accordance with CT176, the fees should not be charged on the director under Schedule E/as employment income.

The Inspector dealing with the accounts of the company to which the remuneration is handed over (the first company) will instruct the office dealing with the company paying the remuneration (the second company) to code the director’s fees etc, as follows:

  1. where the first company is chargeable to Corporation Tax, code NT should be applied
  2. where the first company is not within the charge to Corporation Tax, for example a non-resident company which is not carrying on a trade in the United Kingdom through a branch or agency, code BR should be applied.

In some cases, a director receiving remuneration which is regarded as income of the first company may also receive from the second company remuneration which is regarded as the director’s own income, for example from a separate office or employment with that company. In such cases, the notification showing code NT - a. above - which is sent to the second company should be accompanied by a letter explaining to which remuneration code NT refers and saying that any other remuneration must be taxed under PAYE in the normal way.

In any case where it is established that remuneration received by a director from the second company will not be handed over to the first company, that remuneration should be regarded as income of the director chargeable as employment income.