Jennifer Adams considers some key tax implications where a director decides not to take their salary or to waive it.
Being a director does not, in itself, make that individual an employee of the company. A directorship is an office, not necessarily an employment.
However, if the company enters into a service contract with the director, the terms of which make the director an employee, that director is taxed under the same rules as any other employed earner. HMRC considers that an employee is entitled to payment on the earlier of the date stated on their contract or the date of receipt.
Waiving vs deferment
Note that waiving remuneration differs from deferment. Waiving is where the director gives up their right to the remuneration, whilst deferring is where the director postpones the receipt of the remuneration to a later date.
Should a
