No company shall pay to any officer or employee thereof, whether in his capacity as such or otherwise, remuneration free of any tax, or otherwise calculated by reference to, or varying with, any tax payable by him, or the rate or standard rate of any such tax, or the amount thereof.

Section 136. Prohibition of tax-free payments to directors. (1) A company shall not pay a director remuneration (whether as director or otherwise) free of income tax, or otherwise calculated by reference to or varying with the amount of his income tax, or the rate of income tax, except under a contract which was in force before the commencement of this Act, and which provides expressly, and not by reference to the articles, for payment of such remuneration. (2) Any provision contained in a company's articles, or in any contract other than a contract referred to in subsection (1) or in any resolution of a company or of a company's directors for payment to a director of remuneration free of income tax or otherwise calculated by reference to or varying with the amount of his income tax or the rate of income tax shall have effect as if it provided for payment as a gross sum subject to income tax, of the net sum for which it actually provides. (3) This section shall not apply to remuneration due before the commencement of this Act or in respect of a period before the commencement of this Act. (4) Where a company contravenes this section the company and every officer of the company who is in default shall be guilty of an offence against this Act.

No company shall pay to any officer or employee thereof, whether in his capacity as such or otherwise, remuneration free of any tax, or otherwise calculated by reference to, or varying with, any tax payable by him, or the rate or standard rate of any such tax, or the amount thereof. In this sub-section, the expression "tax" comprises any kind of income-tax including super-tax. This provision shall not apply to any remuneration (a) which fell due before the commencement of this Act, or (b) which may fall due after the commencement of this Act, in respect of any period before such commencement. (Section 100 of Companies Act).