NIM12029 - Class1: Calculating Class1 NICs for Directors: Annual earnings periods: Examples: Fees voted

Regulation 8 Social Security (Contributions) Regulations 2001

Company accounts year-end is 30 June 2021. Director does not receive salary but is voted £56,000 fees at AGM held on 20 September 2021.

| Date | Cumulative | Primary | Secondary | Notes | |——|————|———|———–|——-|

The question to ask in this example is “How does director pay for his or her living expenses in period before earnings voted?” The fees voted and paid in the previous year might have been withdrawn at regular intervals from the personal bank account. There might be another source of income and/or there could be drawings from a loan account with the company. If the loan account is used, there could be payments in advance of earnings within regulation 22 SSCR 2001, see NIM12014. If it is not apparent how the director can fund his or her lifestyle before the voting of remuneration, you should consider this further.