Limited company directors NI

[Deleted member 26818]

From the HMRC website:

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

• they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
• they can decide what work they do and when, where or how to do it
• they can hire someone else to do the work
• they’re responsible for fixing any unsatisfactory work in their own time
• their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
• they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• they can work for more than one client

 

[Nigel]

From the HMRC website:

Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:

• they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
• they can decide what work they do and when, where or how to do it
• they can hire someone else to do the work
• they’re responsible for fixing any unsatisfactory work in their own time
• their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
• they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• they can work for more than one client

You are really making yourself look silly. I honestly think you are just trolling.

 

[Octopus]

Well actually Iv posted it in the buisness section and last time I checked this is buisness related. If you don’t have an answer dont post on it Cheer for your advice to

Matey - that is a HUGE difference between sparks sharing advice on running a business and giving or taking VERY SPECIFIC advice about HMRC taxes .

So I suggest you listen to your accountant.

 

[Deleted member 26818]

You are really making yourself look silly. I honestly think you are just trolling.

The problem here, is you.
You have no idea what you are talking about.
Whereas I have experience of doing exactly as I have suggested.

When I had my Ltd. Co. I paid myself as a subcontractor.
I used the figures supplied to me on the payment advice from whichever agency I was being paid by.
At the end of the year, I got the PAYE/CIS people to send me a form to offset the tax owed by the tax deducted by the agencies.

Only bugbears being: having to send a form off every month to CIS informing them I was employing myself, and the fact that Corporation tax and Companies House tax years start at the beginning of the month, rather than on the 6th of April.

 

[andyb]

Yes it is. It is illegal for anyone to work as a subcontractor whilst actually working as a PAYE employee.

That can't be correct can it?
I know plenty of people who have a full time paye job plus another job that they do on a self employed basis.
As long as it's declared on their tax return what's the problem?
If true then that makes a lot of firemen law breakers.

 

[Deleted member 26818]

That can't be correct can it?
I know plenty of people who have a full time paye job plus another job that they do on a self employed basis.
As long as it's declared on their tax return what's the problem?
If true then that makes a lot of firemen law breakers.

I think what Essex is trying to say is:
“It’s illegal to be paid as a subcontractor if you’re being treated as an employee.”

 

[andyb]

I think what Essex is trying to say is:
“It’s illegal to be paid as a subcontractor if you’re being treated as an employee.”

And is it?

 

[Octopus]

This thread demonstrates perfectly that sparks can’t give tax advice as we can’t agree (like economists) AND the UK tax system is too open to interpretation

 

[Deleted member 26818]

And is it?

I don’t know whether it’s actually illegal, but if HMRC find out they will take action against the employer to make them pay what’s owed.

 

[The Ghost]

thanks for the useless advice

If you don’t have an answer dont post on it

Charming, sure know how to charm the ladies eh?

 

[Nigel]

That can't be correct can it?
I know plenty of people who have a full time paye job plus another job that they do on a self employed basis.
As long as it's declared on their tax return what's the problem?
If true then that makes a lot of firemen law breakers.

What I am saying is it is illegal for someone to work for a company as a PAYE but get paid as a SE contractor. I am not saying you cannot work for company A as PAYE and for company B as a subbie. I am saying you cannot work for a company as a subbie if you are really working as PAYE but not being oaid as PAYE.

All this is on the HMRC website and is very clear.

 

[Nigel]

I don’t know whether it’s actually illegal, but if HMRC find out they will take action against the employer to make them pay what’s owed.

If you are the company managing director it is crystal clear that you are responsible for the day to day running of the business and as such should be employed PAYE. There is no way a managing director can get away with considering themselves as a casual worker with no responsibility for their work to warrant SE employment. It is a joke to even consider as such.

 

[Nigel]

This thread demonstrates perfectly that sparks can’t give tax advice as we can’t agree (like economists) AND the UK tax system is too open to interpretation

I am gobsmacked that some members on here consider themselves business people. Some lack of basic business knowledge is alarming.

 

[Octopus]

^^ darling with pople is abother key attribute ..... sumething surely licking in mont trades pople too

 

[45140]

You cannot work for Company A in any capacity and then also sub-contract to that Company

You CAN work for Company B as a sub-contractor, you simply declare the income as untaxed income, or taxed income from another source.

The most efficient way to pay yourself as a Director is to either pay just below NI limits and then use the remaining unused tax to offset dividend tax or you pay yourself to the limit of your tax free earnings and then pay tax on everything above.

There is now also a personal dividend tax of 7.5% on all dividends paid above £2000. So for tax purposes its 19% Corporation Tax and from you a further 7.5% until you hit your marginal rate. Ltd Company is becoming a less attractive option unless you have a non-working wife who you can employ.

Remember also that HMRC get very funny indeed about interim dividends and will require a full blown account producing. I believe it is still possible to pay yourself an interest free loan provided that it is paid off inside the tax year, otherwise they expect interest to be paid.

As others have already suggested this really is one for the Accountant.