Hello, an employee in the company I work for has recently become a director. In changing his status within payroll, the system I'm using (Liberty Accounts) requires you to indicate whether their NI Calculation Method is through using the Annual Earnings Period or Special Administrative Arrangements. As this director is to be salaried like the other employess should I select Special Admin Arrangements?
Directors have the great facility not to pay their NI until they have used up their LEL. Although they will pay the right amount of NI over the year, it doesn't have to be every month.
So whether this is appropriate for your client is dependant on whether they've used their LEL already or not AND if they are happy to pay slighly more NI in what remains of the tax year rather than spreading it.
Directors do not have to be on the special scheme, they are just permitted to be if they choose.
