Director of ltd co advice please 🙏🏻

[Pinklady18]

My husband and I separated last year, I am an employed director of his ltd company and a 50% shareholder, he is currently paying the mortgage and all the bills as long as I remain a director. I have no idea with regards to tax etc, it obviously saves him money by using my name. My question is, can I still be a director once we divorce? I would like to divorce him ASAP but i can’t afford to do this if I am not longer able to be a director as he won’t pay for things?? Hope this makes sense
Thanks for reading

I'm not a legal expert but an accountant. Legal entity is a completely separate entity and has nothing to do with you been married or not,so he can't stop you from being a director to the company you have shares in. Also you have exactly same rights in decision making re company as him as you are 50% owner.
The big question is do you get paid a monthly salary and do you receive dividends? Ideally interim and final once (twice a year).
My suspicion is your dividends would be a lot more than mortgage and bills..

He does pay me a salary yes, I do not have anything to do with them company at all. It was always planned that when my children were both in school i would help out with admin etc but that did not happen. I don’t want to be involved to be honest as I don’t want much to do with him. I am really thick in these issues and don’t know what ‘dividends’ are?? So clearly I’m not receiving this???

Wow. You need to get clued up. Company director isn’t a name only thing. You are legally responsible for how the company operates. It’s not admissible to say “dunno” when it comes to financial management.

Right wow - you need to get clued up asap on your responsibilities and duties as a director of a company - you can have personal liability as a director if you fail to carry out those duties. This might be a good starting point but you need to get proper legal advice re. (i) your rights as a a 50% shareholder; (ii) your obligations as a director; and (iii) your rights as his wife/in a divorce if he starts not paying for things.

www.gov.uk/running-a-limited-company

Basically you are both responsible for running of the company and entitled to 50% of share of the net profit(after tax ).
As it is Ltd company your responsibility is limited : if the company go bust,you wont have to sell your house or pay with your belongings ,but only with company's assets.
You need to find out who is company's accountant and demand from them last financial statements ,which will show profit company made in last year , this will also show dividends declared(50% of which you should have received).

I am currently questioning my husband, he is telling me that the ltd company is a ‘tax vehicle ‘.

What industry is he in?

Financial Services

ltd company is a ‘tax vehicle
what that even supposed to mean?

I dont know? 😫 It was all set up by his accountant

Well as I previously said,contact that accountant,as a 50% shareholder you have full right to get access to information.
Then get someone else(your friend) to look at it so you can understand how much you should be receiving in dividends.

He’s basically set up a limited company so that he can draw a salary (x2) tax free and then pay the rest in dividends (which saves NI contributions on that income and reduces personal tax liability). Unless his costs are high he’ll be paying 20% corporation tax and around 16.5% vat so it isn’t the tax wheeze it once was.

he'll be paying 16,5% VAT
that doesn't make sense? if directors services provided from outside and recharged to the company they are under normal VAT rules but if director is on company's payroll then no VAT chargeable?

Sorry, basing it on my business. We’re vat registered, so charge 20% but only pay 16.5% on flat rate scheme.

It’s nothing to do with directors pay: just indicating that it’s not really a way not to pay much tax!

This all sounds very "hush hush, shut the wife up" and has left you without a clue as to what's going on and where you stand. Given that you have 50%, I would employ your own accountant to act as your agent. They can communicate with the one your husband employs and make sure you're not being fed nonsense.

In future, please think about what you're signing yourself up for as you can cause yourself a lot of stress and potential liability signing up as a director or secretary in any kind of corporation without knowing what your role and responsibilities are.

Hope you get it sorted OP.

Ah ok,small trader flat rate scheme.
VAT treatment is very much different depending on VAT turnover , but in any case VAT is payable by end customer and retained by company on customers behalf if you like.It is not really a tax on business as such , in reality you profit up to 3,5% of VAT by paying less than standard rate.

Which you then pay 20% corporation tax on. ;)

Well yes,because its your profit and profit is taxed.

Your divorce lawyer should be able to obtain disclosure about the company etc within the context of your divorce. Please realise that it is vital that you realise what duties of financial and legal matters inckuding potential criminal liability you may personally be responsible for as a director.

Pink lady get yourself a clued up solicitor - my situation pretty similar to yours - my x also in financial services - he has to pay mortgage as if he defaults it effects him with regard to working in financial services - as far as I'm aware nothing to do with you being a director of company. Get yourself copies of as much information as you can even if you don't currently understand it - are your discussions amicable - if not get an application in for child maintenance - I had to give up my shares etc in company as part of my settlement - my x played a nasty game

Thanks greenberet
All this messages have freaked me out so much. Yes we are talking and he is being very accommodating. Turns out I am not a director - which from reading all the above is a relief!

Please engage a clued up solicitor, you don't need to tell your h yet.
Talk to the accountant personally without your h there. Try to have questions written down for him/her and Take notes.
You really need to get clued up and I'm afraid stop actually believing everything g your h tells you he is not your friend anymore as hard as that is to get your head around

So in your OP you were a director with 50% shareholding. Now you aren’t. WTF?

Check the record at companies house online. You risk being destitute if he controls the company.

Time to get smart.

No was never a director, not sure where if I got that from tbh. 50% shareholder and an employee receiving a wage. It has been set up this way for the whole time we’ve been married 10 years and no chances have been made since he has left. His wages are paid in to this ltd company and then his tax is split between us to stop paying higher rate tax, by doing this is is enabling him to still pay the mortgage and bills which is over £3k a month. I think I’ve got that right

I’m told by the accountant it is common arrangement for husband and wife to share income from a ltd company