NIM12007 - Class 1: Calculating Class 1 for Directors: Fees received by other companies: Formal right to appoint a Director
Regulation 27(1) & Regulation 27(3) SSCR 2001
Regulations 27(1) and (3) SSCR 2001 exclude directors fees from Class 1 where acompany has the right to appoint a director to the board of another company, by virtue ofeither its shareholdings in, or a formal agreement with, the second company provided that:
- the director is required to hand over to the first company any fees or other emoluments received in respect of his directorship with the second company
- the payment forms part of the chargeable profits for corporation or income tax of the first company
For information, a company may be chargeable to income tax rather than corporation taxif it is non-resident in the UK and trades through a branch or agency in the UK. If youneed to know whether a company is chargeable to corporation tax, or income tax, you shouldcontact the Inspector of Taxes dealing with the company.