Pensioner as co-director

N

nave

Registered User
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I'm an IT contractor and will soon move to a Limited Company structure, for which I will need a co-director.

I am considering choosing my father, who has recently retired (early, at 62).

Are there any implications (on his pension or tax liability) in him becoming a co-director? The directorship if of course a formality and he will have no involvement int he company (which itself is merely the legal structure within I which I will operate as a contractor).

Thanks in advance
 
If he is not paid, there is no tax liability.

He would be unwise to accept a directorship if he is not to be in any way involved with the company. There should be board meetings, and he should participate at that level.
 
thanks for the replies so far. I forgot to mention that he is currently drawing unemployment benefit. Given that he will not be payed by the company, is it safe to say his entitlements will not be effect (either currently or if he ever returns to employment)?
 
As he is only 62 he will not reach retirement age till 2015 when his State pension becomes payable.
His unemployment benefit will run out within the current year and his options then will be

  • Apply for Jobseekers Allowance (means tested)
  • Live from independant means/occupational pension
  • Return to work
If he were to apply for a means tested payment while also being a Company Director (albeit in name only) perhaps SW may be asking a lot of questions
 
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