RTM Director Paid For Work

JP26

I'm a director of a small RTM co. Over the past 4 years I've also effectively been the handyman of the block ( alongside running the entire RTM) , fixing various small issues that a handyman would otherwise be doing. 

Up until this point I've done it for free, but it's got to the stage where it's too much and I need to start charging to make it worthwhile, or otherwise outsource. 

I know an RTM director cannot collect wages from a service charge fund, but is there anything wrong with me setting up a limited company / sole trader and invoicing the RTM co? 

This downside would be the corporation tax return involved, which for the negligible amounts ( less than 1k per year) might be additional hassle. 

In the past, the RTM company ordered tools/ materials for certain jobs, which I've then just kept afterward ( with the agreement with the rest of the directors). 

I'm trying to find an approach that's as by the book and with as little conflict of interest.  

Bookworm105

do you operate as a handyman for any other entity? ie do you already have a handyman business?

what does your RTM contract of employment list as your responsibilities? it is a legal requirement that a director has a service contract but what services they provide is a matter of what is said in that contract

if your role as director does not require handyman work then the RTM is not required to pay you through its own payroll. Therefore, the RTM is free to choose how it engages with "you" and you are free to chose to do so either as a sole trader or as your own (separate obviously) Ltd co. 

from your personal financial perspective, the costs and admin effort of operating your own Ltd Co will probably be counter productive if the RTM will be its only customer.
Probably a lot easier to invoice the RTM as a sole trader, unless your personal tax position means you need to "shelter" RTM handyman income from your own personal taxation by leaving the money in your own (handyman) Ltd. 

eddddy

As above, you should be able to submit invoices for your handyman work, as a sole trader.

How are you dealing with the whole issue of service charges?


Are you doing it informally?

• i.e. You tell people what they need to pay, and they pay it voluntarily?

Or are you doing it formally?

• i.e. following the letter of the law....
• ...including the Landlord and Tenant Act 1985, Commonhold and Leasehold Reform Act 2002, etc

• Doing section 20 consultations, issuing service charge demands in the correct legal format, etc

• Following the terms of the leases to the letter

If you're doing it informally, you can ask for whatever costs you want for whatever purpose (but you can't tell fibs about the purpose). It's up to the leaseholders to decide whether they will voluntarily pay you.

If you're doing it formally, you should be able to enforce payments. But the leaseholders can challenge them at a tribunal.


(Unless you have made another legally binding agreement with the leaseholders about service charges - outside of what the lease says.)

eurobabe

I was in a similar situation as yourself doing some of the jobs on site as a resident.director.You have to also factor in insurance public liability insurance, if someone has and accident in site and tries to use you.In the end it was just easier to get a company in to do the work.thr amount of effort wasn't worth it for me.

rtmdirector

your articles of association would definitely say no remuneration for directors. If you still want to risk it which is not worth then I suggest get this documented by calling for an AGM otherwise this transaction will be treated as violation of articles of association and companies act

JP26

Thank you both for the replies. My main employment is working in IT, being an RTM director whilst also doing handyman work is just a side gig.


"Probably a lot easier to invoice the RTM as a sole trader, unless your personal tax position means you need to "shelter" RTM handyman income from your own personal taxation by leaving the money in your own (handyman) Ltd. "

I think the latter is the best option, set up a ltd company, invoice RTM for work and then just expense tools, material etc so I don't pay corporation tax