NIM12015 - Class 1: Calculating Class 1 NICs for Directors: Directors' loan accounts and payments on account of earnings: Miscellaneous
The Companies (Model Articles) Regulations 2008 (SI 2008 No 3229)
The definition of director for the purposes of annual earnings periods relies on whether the director is a director of a company within the Companies Acts (NIM12003).
The Companies Acts provisions also need to be considered more generally. As mentioned previously, if there is no service or other remuneration agreement a company has usually adopted the appropriate model (for example, public company) from the Companies (Model Articles) Regulations 2008, SI 2008/3229) for remunerating directors, or sometimes an earlier model.
The provisions of the Companies Acts are also important in other circumstances. They define what records a company has to keep and the form of its accounts etc. Section 154 onwards defines the qualifications, duties and responsibilities of directors (for company secretaries, where needed, see section 270 onwards). Section 215 onwards contains the need for approval by members of payments to directors for loss of office. Sections 226B to 226D contain further provisions governing remuneration payments and loss of office payments to directors of quoted and traded companies. Section 190 onwards contains provisions governing substantial property transactions involving directors. The latter provisions are of particular importance where non-cash remuneration avoidance schemes are used because if the transfer is not legal, the argument that there is entitlement to a cash payment is strengthened.