# Can one company invoice another company if they have directors in common?



## Nutso (11 Oct 2012)

Hi All,

Can a director of Company A issue an invoice for payment to Company B (of which he is also a director) and pay all PAYE in Company A?

Thanks,
Nutso


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## J.Ryan (11 Oct 2012)

Nutso said:


> Hi All,
> 
> *Can a director of Company A issue an invoice for payment to Company B* (of which he is also a director) and pay all PAYE in Company A?
> 
> ...


 

That is different to the question in the title,  which is your question?







www.jwr.ie


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## Nutso (11 Oct 2012)

Nutso said:


> Hi All,
> 
> Can a director of Company A issue an invoice for payment to Company B (of which he is also a director) and pay all PAYE in Company A?
> 
> ...



This is my question - I was trying to make my title shorter but I can see how it would cause confusion.  I don't seem to be able to edit the title though.


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## mandelbrot (11 Oct 2012)

Nutso said:


> This is my question - I was trying to make my title shorter but I can see how it would cause confusion.  I don't seem to be able to edit the title though.



Have a read of this (emphasis on paragraphs 4&5) and if you still have questions come back...
[broken link removed]


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## Nutso (11 Oct 2012)

Thanks Mandelbrot, I appreciate it.  I was having difficulty finding anything when I was searching online.

From my reading of it, it seems that work relating to company B should be paid as PAYE income in Company B and if it is not paid in this manner, Company B are still liable to PAYE/USC etc on the amount. 

Have I got that right?


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## NumbrCrunchr (19 Oct 2012)

Another way of looking at it is that there is nothing stopping company A invoicing company B for services provided in the normal course of business. Any related party transaction has to be disclosed in the accounts


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## WizardDr (29 Oct 2012)

@Nutso not sure I am folllwing this. I think what you are saying is that X is  a Director in A Ltd. and is a Director in B Ltd. There is no indication here as to what the relationship with A Ltd and B Ltd is. 

Is the Invoice for X is in relation to his services as a Director in B Ltd and that A Ltd want to issue an invoice for that?

The normal practice is that PAYE / PRSI is paid on Directors emoluments so that would be B Ltd. However, why would X want it all through A Ltd v B Ltd? Is he a 15%+ shareholder in either?

You may have to share a bit more to get a better answer.


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## Nutso (30 Oct 2012)

X is a director in A Ltd and in B Ltd.  He is a 100% shareholder in A Ltd and a 50% shareholder in B Ltd.

There is no relationship between A Ltd and B Ltd apart from a director in common.  There have been loans issued from A Ltd to B Ltd in the past which have been repaid.

The invoice for X from A Ltd to B Ltd would be for works done on behalf of B Ltd.  A Ltd is a prosperous company in its own right and not purely set up for the purposes of transferring money from B Ltd.

X would prefer to hold funds in A Ltd and take a salary from A Ltd, paying corporation tax on the balance, rather than paying money from B Ltd as salary.  Is this possible?  Or do you require further information?


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## NumbrCrunchr (31 Oct 2012)

Perhaps the nub of the matter is whether the work done on behalf of B Ltd. is specifically related to X's role as a company director or is in the normal activity of A Ltd. 

If it is the latter then A Ltd could invoice B Ltd, bearing in mind the requirement to disclose in your accounts. The regulations referenced in previous posts might come in to play if A Ltd was clearly being paid for X's role as a Director of B Ltd.

You should get professional advise related to your specifics

Regards
numbercruncher


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