Is Employee NI due on LC

[dangermaus]

Sorry if this a silly question but I'm unsure as to what rate/s of NIC will be due under settlement and in future tax years.

This was my previous setup:

- I contracted via my own Ltd company
- Each month, once the end client paid into my Ltd company account, I paid the invoice from my Ltd Company account to SP Management.
- I also paid a dividend from my Ltd Company account into my personal account (less than the tax-free allowance)
- SP Management made a retainer payment into my personal account (equalling the tax-free allowance)
- SP Management made a loan payment into my personal account

I thought I understood that as I'm self employed (I have never had any kind of payroll setup and wont until the start of the 19/20 tax year), this whole time I should have been paying class 2 and class 4 NIC

Some people have indicated that as I am an employee of my own Ltd Company, that I should have been, and should still, be paying class 1 (employers and employee's NIC)

As there is a big difference between class 4 (9%) and both class 1's (12% AND 13.8%) I would like to get an idea what I will be facing in settlement terms and also what I will be facing at the end of this tax year.

I have some loan payments in this tax year (I stopped using SP Management half way through this tax year and now have a conventional Ltd Company set-up) which I assume I will be declaring as income in my SA. This is within the 20% tax band. I also have the rest of my income for this year in dividends.

Should I be playing 20% income tax on these loan payments (on everything above the allowance) NIC (on everything above the allowance (but which class/es?)) and then dividend tax on everything else?

[losingsleep]

In the same boat

This was my previous setup:

- I contracted via my own Ltd company
- Each month, once the end client paid into my Ltd company account, I paid the invoice from my Ltd Company account to SP Management.
- I also paid a dividend from my Ltd Company account into my personal account (less than the tax-free allowance)
- SP Management made a retainer payment into my personal account (equalling the tax-free allowance)
- SP Management made a loan payment into my personal account

I am in the exact same boat. Used SP Management for a few months in 2017. Would be grateful for thoughts on this. Before and after using SP Management, I was permanently employed, so I was up to date on my PAYE and NICs.

@dangermaus - I will try to PM you if ok. I just joined so my post will need Mod approval.

[losingsleep]

Reaching out to Dangermaus

Sorry if this a silly question but I'm unsure as to what rate/s of NIC will be due under settlement and in future tax years.

This was my previous setup:

- I contracted via my own Ltd company
- Each month, once the end client paid into my Ltd company account, I paid the invoice from my Ltd Company account to SP Management.
- I also paid a dividend from my Ltd Company account into my personal account (less than the tax-free allowance)
- SP Management made a retainer payment into my personal account (equalling the tax-free allowance)
- SP Management made a loan payment into my personal account

@Dangermaus - I should have mentioned before that I would love to talk to you about this as I am in a very similar situation with SP Management and am trying to figure out what to do (settle or loan charge) and what my potential liability is.

I just joined CUK after lurking for several months (great advice on here), so I have no idea how to private message or anything.

@Mods - any advice? Feel free to delete this post (but I would be grateful if you can show me how to PM Dangermaus).