Part time employed and self emplyed

[AlanBurgess]

Hello

I'm after some advice regarding my current situation... I am currently employed part-time, where I pay Tax, NI, Pension contributions etc, but I also work for myself and my own Ltd company. As it stands I am not on the payroll of my Ltd company and therefore don't take a salary, but I was wondering if this will have a negative impact on the amount I pay in corporation tax?
Would I be better to add myself as a part-time employee in my own company at minimal hourly rate and take dividends, or stay as I am with a part-time role with someone else and just do work on the side and take dividend and expenses?

I hope that makes sense :|

Thanks in advance
Alan

[Protagoras]

In general, the more paid out of the LtdCo in employee costs, the lower the profit, and therefore the lower the corporation tax.

You need to run the numbers to optimise income etc across multiple sources … its quite easy to model in a spreadsheet.

[Fred Bloggs]

Before OP models anything, he or she needs to understand they are not self employed. If they don't understand that, the wrong scenario entirely is going to be modelled in the spreadsheet.

[Protagoras]

Before OP models anything, he or she needs to understand they are not self employed. If they don't understand that, the wrong scenario entirely is going to be modelled in the spreadsheet.

OP stated ...

"I am currently employed part-time, where I pay Tax, NI, Pension contributions etc, but I also work for myself and my own Ltd company."

I read that as OP has potential employment income streams
- part time employee [also]
- work for self (self-employed) [and]
- limited company

So I read this as there were three income sources to model ...

[Fred Bloggs]

OP stated ...

"I am currently employed part-time, where I pay Tax, NI, Pension contributions etc, but I also work for myself and my own Ltd company."

I read that as OP has potential employment income streams
- part time employee [also]
- work for self (self-employed) [and]
- limited company

So I read this as there were three income sources to model ...

So - I read the title which specifically says self employment and part time employment but with a limted company. I suppose either of us is right depending on how you read it and the actual facts. It's extremely common for one man limited company owners to refer to themselves as self employed or working for themselves when they aren't. They aren't usually employees of their company either, another common misstatement.

Not to worry, I'm sure the message is quite clear. You can't model anything accurately unless you fully understand what it is you are modelling. GIGO.

[hobnob]

Just to clarify one point, you can be on the payroll of your limited company (as a director) without being an employee. I.e. you have 2 independent questions:
* Should I be an employee? (The answer is almost certainly no.)
* Should I be on the payroll? (As others have said, you need to play around with scenarios in Excel.)

[AlanBurgess]

Many thanks for the replies

Just to clarify hobnob, Protagoras, @fred-bloggs I am employed part time and work Mondays and Fridays in that that role, I also have a Ltd company, of which I am a director. So to answer the question, and apologies for my poor wording, I have 1 part time role and I am a director of my own business, which has no employees.

I am being asked to work a couple of days a week under my Ltd company, so wanted to know if from a corporation tax perspective, I was better being a part time employee, or not being employed at all by my own company and simply take directors dividends?

I'm no master of spreadsheets, so any pointers as to what information I need to be calculating would be great! I have used an accountant in the past, but I'm trying to learn more about the way all this works and there seems to be a lot of if's and but's with all scenarios. :|

[jamesbrown]

Corporation tax is paid on profits.
Corporation tax and employment status have nothing to do with each other.
Directors and dividends have nothing to do with each other. Dividends are paid to shareholders from retained profits.

Guides are over on the right (trust me, you need them) --->

[Fred Bloggs]

Many thanks for the replies

Just to clarify hobnob, Protagoras, @fred-bloggs I am employed part time and work Mondays and Fridays in that that role, I also have a Ltd company, of which I am a director. So to answer the question, and apologies for my poor wording, I have 1 part time role and I am a director of my own business, which has no employees.

I am being asked to work a couple of days a week under my Ltd company, so wanted to know if from a corporation tax perspective, I was better being a part time employee, or not being employed at all by my own company and simply take directors dividends?

I'm no master of spreadsheets, so any pointers as to what information I need to be calculating would be great! I have used an accountant in the past, but I'm trying to learn more about the way all this works and there seems to be a lot of if's and but's with all scenarios. :|

OK. So, as I suspected all along. You're not self employed and you aren't intending to be self employed. Being a limited company director is not self employment. Normally it isn't employment either, unless you have a contract of employment. That would be very unusual. Being paid salary by your limited company does not make you an employee.

[Protagoras]

Many thanks for the replies

Just to clarify hobnob, Protagoras, @fred-bloggs I am employed part time and work Mondays and Fridays in that that role, I also have a Ltd company, of which I am a director. So to answer the question, and apologies for my poor wording, I have 1 part time role and I am a director of my own business, which has no employees.

Thanks for clarifying the income streams. Interpretation victory to @Fred Bloggs