Shadow director entitlements

[Wez]

Hey All,

Just wondering if anyone on here knows what entitlements a shadow director has.

For example are they able to claim mileage for trips made on behalf of the company?

:search:

[SupraAyf]

Hey All,

Just wondering if anyone on here knows what entitlements a shadow director has.

For example are they able to claim mileage for trips made on behalf of the company?

:search:

Wez,

A SD should be able to draw upon the majority of the actual bosses entitlements but the contract that supports your work commitment should in fact state your allowances. Also, your work commitment should be clearly defined in a well thought out Job specification which you should also check.

If the SD appointment is a new, or newly prompted job where you have just picked up the reigns, then you should seek clarification on your full entitlement.

In summary; yes, but not to all.

[Rico2006]

Your contract will state your entitlements. For instance, just by attending a board meeting, you can be classed as a shadow director, but you wont get any of the benefits associated with being a director. However, in the eyes of law, you get all the responsibility so make sure you know the ins and outs of the business.

[Wez]

Kind of a grey area as its a company I use to own but still have alot of influence in, I do some work for it and was wondering if I could claim the mileage etc.

[SupraAyf]

Kind of a grey area as its a company I use to own but still have alot of influence in, I do some work for it and was wondering if I could claim the mileage etc.

It is a grey area as you can see from the two responses; both of which contradict each other. The fact of the matter is that the policy of entitlement will be set by each and every company on a tailored basis.

I am fairly familiar with companies that provide a full range of supporting assets to SD's where as others will simply give nothing.

Regardless of your previous status or current input, I think you now need to involve yourself with an element of negotiation in order to confirm your company status - this will also allow you to underpin your allowance factor as a SD

[Wez]

OK, so if the board agrees to my entitlements and I have it in writing then I should be able to claim even as an SD.

[SupraAyf]

OK, so if the board agrees to my entitlements and I have it in writing then I should be able to claim even as an SD.

That's right Wez. It is up to the board and the finance manager on how they approach the payments as you won't be an employee etc.

What they can do however; is put it through the company books as 'external consultants expenditure' if that makes sense.

This way, the company balance sheet maintains its integrity against any outside inspection (i.e. audit).

Hope this helps Sir!

[Wez]

Would that mean that the money for mileage still comes back to me in a form of directors loan which is tax free for me to take when I like?

[CJ]

Would that mean that the money for mileage still comes back to me in a form of directors loan which is tax free for me to take when I like?
No. The money the company will pay you is as an external consultant and as such, will be liable to tax as an earned income which you must declare on your tax self assessment.

[SupraAyf]

Would that mean that the money for mileage still comes back to me in a form of directors loan which is tax free for me to take when I like?

Ahh! Grey area again Sir - Tax is always going to kick you in the bollox in such circumstances (if everything id done right), therefore, it is essential that the necessary fat is placed in the mileage allowance in order for you not to be out of pocket at the end of the day.

The alternative to the whole system is that the board & directors agree to award you a part-time status where you claim, say £500, per month for your troubles. The tax issue will be covered and your monthly wage will cover your expenditure automatically - this is probably the best way of doing it and it saves the complicated claims procedures etc.

The only drawback to this is the dreaded tax returns and you ensuring that your total annual finances are in order. Adding 500 squids per month may also push you over a particular tax threshold and you may have to pay more in the long run. That is of course your business and not for this forum!

[Wez]

Great info thanks :thumbs:

[SupraAyf]

Great info thanks :thumbs:

;)