Every company director should know the following to ensure that the company and director are compliant with Revenue and the Companies Registration Office (CRO).
1. Deadline Dates
Deadline dates are strictly enforced by Revenue and the CRO and penalties and fines are regularly imposed. Ensure that you keep a note of your company’s CRO Annual Return Date and Corporation Tax deadline and that you forward your books and records to your accountant as soon as possible after the year end to avoid costly and unnecessary penalties.
2. Payments to Directors
Directors should only withdraw money from the company as part of a salary, dividend, reimbursement for motor and travel expenses or repayment of a loan given to the company. Any payments in excess of these could contravene the Companies Act and trigger a tax liability and legal action. Always consider seeking professional advice before withdrawing money from a company.
3. Mileage and Subsistence
Subject to certain conditions directors can claim mileage and subsistence to reimburse them for genuine business travel. Note that the vehicle must be in the director’s name and not a company vehicle. A director cannot claim “on the double” e.g. claim mileage from the company and pay for the petrol by company cheque; or claim subsistence and simultaneously pay for lunch on the company credit card. Proper records must be kept. Ensure that mileage and subsistence rates do not exceed the maximum rates set by Revenue.
4. Directors’ Income Tax Returns
Most company directors need to submit an income tax return by 31 October each year, even if their only source of income is from their company.