CEO of a Registered Charity-1-2 days P/Wk can this be a contract position or does it have to be PAYE

Jillanddy

krissy08 said:

Pease note that I am not a Trustee. Neither is the Candidate.

Then the people doing the asking of the Charity Commission should be the trustees! They are the ones whose assets are at risk if they get this wrong.  

That aside,  I still don't think it's a good look for a charity. If it came to my attention that a charity I personally supported was doing this,  legal or not,  I'd withdraw all support immediately.  

Sandtree

Undervalued said:

Given that it is only one or two days a week is there any reason the CEO could not set up a limited company, which in turn provides executive services to this charity (and any other clients it may have)?

It that any different to a solicitor acting as company secretary to a limited company or a company limited by guarantee? Or subcontracting the bookkeeping to a firm rather than employing a bookkeeper.

It is surely the trustees that have the legal responsibility for the running of the charity. In many situations they would employee a CEO but nothing says (as far as I know) that they can instead sub contract what my normally be a CEO's duties to one or more contractors.

A CEO is materially different to CoSec and in the case of a CoSec you appoint the firm itself and not an employee of the firm.

As soon as you go to the government tool on IR35 https://www.tax.service.gov.uk/check-employment-status-for-tax/determination and select Yes to being an officer of the Client you immediately get an inside determination. A CEO will also have line management responsibility which is another big no no for IR35

Whilst you can get incorporated directors, for now at least - they keep talking of banning them, that really doesn't work for executive roles like CEO as the figure head for a company needs to be a person not another company.

Marcon

krissy08 said:

Hello Undervalued- those were my thoughts exactly. If they provide services for a number of companies of which the charity is just one?
I can't see how they would reasonably expect a permanent employee position CEO for a small charity that only requires 1-2 days a week
They do require some sort of consultancy expertise from the CEO and there is a board of trustees involved.
I guess I am asking would it be against any current law for the company to engage the services of a limited company personnel to act as their CEO for 1-2 days per week.

If the CEO came on board and deferred all their salary to their pension-would that avoid tax on it? The candidate does not want to incur additional taxes from taking this position and we are looking at options

I think you're confusing several things. Someone can be a permanent part time employee - why not?

If the candidate doesn't want to incur additional taxes from taking this position (which planet are they on?), then suggest they carry out the role pro bono. If they are paid to do any sort of role, then their potentially taxable income increases, charity or otherwise. 

Undervalued

Sandtree said:

Undervalued said:

Given that it is only one or two days a week is there any reason the CEO could not set up a limited company, which in turn provides executive services to this charity (and any other clients it may have)?

It that any different to a solicitor acting as company secretary to a limited company or a company limited by guarantee? Or subcontracting the bookkeeping to a firm rather than employing a bookkeeper.

It is surely the trustees that have the legal responsibility for the running of the charity. In many situations they would employee a CEO but nothing says (as far as I know) that they can instead sub contract what my normally be a CEO's duties to one or more contractors.

A CEO is materially different to CoSec and in the case of a CoSec you appoint the firm itself and not an employee of the firm.

As soon as you go to the government tool on IR35 https://www.tax.service.gov.uk/check-employment-status-for-tax/determination and select Yes to being an officer of the Client you immediately get an inside determination. A CEO will also have line management responsibility which is another big no no for IR35

Whilst you can get incorporated directors, for now at least - they keep talking of banning them, that really doesn't work for executive roles like CEO as the figure head for a company needs to be a person not another company.

No, or at least not always.

I have for many years been involved in my professional association (a Company Limited by Guarantee). Our company secretary is a solicitor and although we pay his firm (in which he is a partner), it is he personally who is listed at Companies House as our company secretary.

Marcon

Undervalued said:

Sandtree said:

Undervalued said:

Given that it is only one or two days a week is there any reason the CEO could not set up a limited company, which in turn provides executive services to this charity (and any other clients it may have)?

It that any different to a solicitor acting as company secretary to a limited company or a company limited by guarantee? Or subcontracting the bookkeeping to a firm rather than employing a bookkeeper.

It is surely the trustees that have the legal responsibility for the running of the charity. In many situations they would employee a CEO but nothing says (as far as I know) that they can instead sub contract what my normally be a CEO's duties to one or more contractors.

A CEO is materially different to CoSec and in the case of a CoSec you appoint the firm itself and not an employee of the firm.

As soon as you go to the government tool on IR35 https://www.tax.service.gov.uk/check-employment-status-for-tax/determination and select Yes to being an officer of the Client you immediately get an inside determination. A CEO will also have line management responsibility which is another big no no for IR35

Whilst you can get incorporated directors, for now at least - they keep talking of banning them, that really doesn't work for executive roles like CEO as the figure head for a company needs to be a person not another company.

No, or at least not always.

I have for many years been involved in my professional association (a Company Limited by Guarantee). Our company secretary is a solicitor and although we pay his firm (in which he is a partner), it is he personally who is listed at Companies House as our company secretary.

Quite. You can have an individual company secretary or a corporate company secretary, subject to any provisions in the Articles/other governing documentation which might dictate you must have an individual or a corporate secretary.

Ath_Wat

Any organisation big enough to warrant somebody with the title "CEO" shouldn't need to be asking questions like this on internet forums.

General_Grant

Ath_Wat said:

Any organisation big enough to warrant somebody with the title "CEO" shouldn't need to be asking questions like this on internet forums.

The OP is neither a trustee (nor a candidate).  It is not the organisation which is asking the question but someone (perhaps a junior employee?) who is concerned.

Even so, I don't see that an organisation with a Chief Executive Officer needs to be so big that they shouldn't seek information on this forum.

Jillanddy

General_Grant said:

Ath_Wat said:

Any organisation big enough to warrant somebody with the title "CEO" shouldn't need to be asking questions like this on internet forums.

The OP is neither a trustee (nor a candidate).  It is not the organisation which is asking the question but someone (perhaps a junior employee?) who is concerned.

Even so, I don't see that an organisation with a Chief Executive Officer needs to be so big that they shouldn't seek information on this forum.

The OP hasn't specifically said they aren't the candidate. They said they aren't a trustee "and neither is the candidate". But I do think that this is a murky area and that they can get opinions ere - but I think we could offer anything more than opinions. It's possible the OP is the candidate speaking in the third party. But I do think this is one for the Charity Commission - if it is a concerned individual they can raise a concern with the Charity Commission without being named as the source.

Undervalued

Ath_Wat said:

Any organisation big enough to warrant somebody with the title "CEO" shouldn't need to be asking questions like this on internet forums.

I agree.

It can be a bit like calling the only person in a small boat the captain. Legally they are but frankly it is a bit pretentious!