Contractors working through their own limited companies are NOT self-employed and therefore should not be caught.
Some agencies have sent questionnaires to contractors (and their Limited companies) with some standard questions, for example:
You only employ your workers on a contract of employment and pay them through the PAYE scheme (which allows for expenses to be paid gross in certain circumstances)?
You are a personal service company?
If you are a personal service company:
- the worker deployed or to be deployed by you controls the company and/or is the sole director of the company
- you do not make or plan to make any payments gross except allowed expenses or dividends
- your payroll is also operated in the UK
- If your answer to both 1 and 2 is No please advise the nature of the engagement between you and the service provider
- Director’s agreement
- If your answer to 4 is Yes to “Other” please provide details
If you are a director of your own Limited company you should be answer these questions:
- Possibly yes but probably no; most directors do not have a contract of employment.
- Yes probably although be careful if you co-own the company with your spouse
- Yes even if you pay yourself £663 per month such that no tax or national insurance is due in 2014-15 this answer is still yes.
- Probably yes if you do it yourself or your accountant runs your payroll as part of your package
If you are self-employed and you work through an agency you may be caught.
A further blog will be posted for the self-employed.
If you need help on determining whether you will be caught by these rules then contact Clearways Accountants on 01737 244298 or complete the contact form below.
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