Tax Tips for Company Directors

 

Directors of Small Companies – Some Do’s and Dont’s

The director of a small company is normally an owner-manager. He/she faces a number of challenges. They must run the business while remaining tax and legally compliant. This leaflet briefly outlines a few issues which often cause problems

DO!

Use the audit exemption to reduce costs. Your accountant will advise you

File CRO returns and accounts on time. This avoids penalties. Being late will lose you the audit exemption

Manage your pension plan. Use company contributions where cash allows

Have shareholder agreements. These help minimise disputes

Have first option on other shareholders holdings on their leaving/death. There are insurance policies to help in this area

If you are a professional services company e.g. consultants, avoid building up retained profits in the company. This incurs non-refundable surcharges

DONT!

Take loans from the company. This may breach company law and incur witholding taxes on advances

Hold rental property in a trading company. This can lead to tax surcharges

Take assets at below value. This will be a distribution taxable at the high rate. There will also be Dividend Witholding Taxes. For tax-efficient methods of asset extraction e.g. properties, consult your tax adviser.

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