Potentially yes. In understanding whether a company director qualifies for the Scheme, the key factor is whether the director is considered an employee, as the legislation behind the Scheme states that the voucher must be “given to an employee by his or her employer“. Therefore, the following commonly applies –
- Proprietary Director – qualifies for the Scheme as long as they are in paid employment in the company. As proprietary directors are classified as self-employed for PRSI, and there is no employer PRSI for self-employed workers, the overall tax-saving may be 11.15% less than for non-proprietary directors.
- Salaried Director – qualifies for the Scheme as they clearly satisfy the employer / employee relationship requirement.
- Director who receives Directors’ Fees – qualifies for the Scheme as long as the directors fees are paid via payroll (which is the method Revenue recommends).
- Non-Exec Director who receives Dividend Income – though not specifically excluded from the Scheme, these directors may not satisfy the employer / employee relationship requirement. Companies should seek their own specific tax advice on this.
- Unpaid Directors – normally do not qualify for the Scheme as they are not employed by the company. In some cases, employed directors can forego salary while still being considered employed. Companies should seek their own specific tax advice on this.
For more details, and to download a comprehensive pdf guide, please visit our Small Benefit page.