Running a Community Interest Company (CIC) is about purpose — not profit. But even purpose-driven directors need to make a living. That’s where things get a little tricky. You might be asking:
“Can I take a salary as a CIC director?”
“Am I classed as an employee?”
“What are the rules around CIC director pay in the UK?”
You’re not alone. These are some of the most common questions we hear — and in this guide, we’re going to clear them up once and for all.
👥 What Is a CIC Director?
If you’re listed as a director of a CIC, your job is to manage the company responsibly and in the community’s interest. You’re a legal officer — meaning you have to follow specific rules, file annual returns, and ensure funds are used correctly.
But here’s the key point: being a director doesn’t automatically mean you’re self-employed or an employee.
Let’s unpack that.
❌ Are CIC Directors Self-Employed?
No.
You are not self-employed just because you’re a director of a CIC.
CICs are limited companies — which means they’re separate legal entities. If you’re working through your CIC, you’re working for the company — not as a sole trader.
In most cases, HMRC considers CIC directors “office holders,” which is a separate category altogether. But…
✅ Can CIC Directors Take a Salary?
Yes — if certain conditions are met.
If you’re actively working in the business — delivering services, managing projects, handling admin — you can be classed as an employee in addition to being a director. In that case, you’re perfectly entitled to receive a salary.
To do this properly:
- 📄 You must have an employment contract
- 🧾 The CIC must register as an employer with HMRC
- 💷 Payments must go through PAYE
- 🧮 Salary must be reasonable and justified
This setup is perfectly legal — and very common, especially in small CICs where directors do the day-to-day work.
💸 How Can You Pay Yourself as a CIC Director?
Here are the main (legal) ways you can get paid:
1. Salary (PAYE)
If you’re doing regular work, pay yourself a salary as an employee.
✔ Taxed at source
✔ You get payslips and pension contributions
✔ Must be recorded and justified in your accounts
2. Reimbursed Expenses
You can claim back business-related costs — like mileage, train tickets, or equipment.
✔ Keep receipts
✔ Must relate directly to CIC activities
✔ No tax is paid on these (they’re not income)
3. One-off Director Fees
Some CICs pay directors small, one-off fees for specific duties.
✔ This must be recorded
✔ Must follow your governing documents
✔ Always check for potential conflicts of interest
🧾 What About Dividends?
If your CIC is limited by guarantee (as most are), dividends don’t apply.
If it’s limited by shares, you can pay dividends — but this is rare, tightly regulated, and usually capped. And if you’re not making a profit, dividends aren’t even an option.
🚨 What Are the CIC Director Remuneration Rules?
Here are the key things to keep in mind:
- 💡 Check your Articles of Association – they may restrict or set conditions on director pay
- 🛑 Avoid setting your own salary without proper authorisation – this can create a conflict of interest
- 💬 Document everything – minutes, contracts, and approvals
- 📉 Don’t pay yourself if it puts the CIC at risk – the Regulator frowns on this
🚫 Mistakes to Avoid
❌ Paying yourself “under the table” or without a proper PAYE setup
❌ Claiming personal expenses as business costs
❌ Taking pay when the CIC has insufficient reserves
❌ Not recording salary decisions in meeting minutes
🙋 FAQ: CIC Director Pay in the UK
Can CIC directors take a salary in the UK?
Yes — if they have an employment contract and the CIC has registered with HMRC for PAYE.
Are CIC directors self-employed?
No — they are classed as “office holders,” not self-employed individuals.
What is the average CIC director salary UK?
It varies depending on the role and income level of the CIC. According to Indeed, operational CIC directors often earn between £40,000 and £60,000 annually.
Do CIC directors get dividends?
Usually no. Most CICs are limited by guarantee, which means there are no shares — and therefore, no dividends.
✅ Ready to Pay Yourself (the Right Way)?
If you’re still wondering whether you can take a salary as a CIC director — or how to do it properly without breaking the rules — we’re here to guide you every step of the way.
At KG Accountants, we’ve helped hundreds of CICs navigate:
- Setting up director salaries
- Complying with CIC Regulator rules
- Registering for PAYE with HMRC
- Paying yourself and your team legally and efficiently
Whether you’re just getting started or reviewing your current setup, we’ll help you avoid common mistakes and structure your pay the right way — tax-efficient, compliant, and stress-free.
📞 Call us today on 0207 078 7477
💬 Or click here to book your FREE initial consultation
Have a quick question about CIC payroll or director pay?
No problem — our team’s happy to help. Click here to send us a message online.
Categories: CIC Directors, CIC Dividend, Community Interest Companies, Director, Director Pay, Director Wage, Employment and related matters, Payroll
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