self employed- directors wage

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  • #40011
    Anonymous
    Guest

    good morning my little petit choux’s

    i have a claimant’s profit and loss accounts for 2010/11. he has a limited company and he has declared on his accounts that one of his declared expenses is a directors salary.

    now if he is paying himself a salary from his own business – does this make him an employed earner or do i consider it as just “drawings” from the business and if so how do i treat it, as my understanding is that you ignore drawings from a business

    many thanks

    #114190
    John Boxall
    Participant

    As a director he is an employed earner, so you simply take his salary into account.

    Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and in short you are for ever floored.

    Wilkins Micawber, Ch12 David Copperfield

    #114191
    Anonymous
    Guest

    thanks for that

    #114193
    Anonymous
    Guest

    If he is paying himself a salary that is accounted for within the Profit and Loss account it is treated as earnings of an employed earner, not as a Director. It is not the same as Director’s Remuneration, which he might also be getting, and will be shown separately within the accounts

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