Paying yourself as a freelancer from a company you're the director of

[ReeCee]

I freelance as a web designer (self employed) but I also have a theatre company, of which I'm a director, running on the side (limited company).

More of my time has been spent working on the theatre company's website in recent months than usual and it's beginning to affect income levels from other web design work. It then occurred to me that, surely, the company should pay the designer for their time. However, being that the designer is also the director of the company, I figured it may not be that simple or even the best route.

My questions are: would it be kosher for me to invoice my company as a freelance web designer for my time, and then pay my own invoice from my company? What factors do I need to consider and would it be possible to do on a regular basis? I intend on adding more features to the website as time goes by.

Thanks!

 

[Mr D]

You can pay yourself a wage from the company as an employee. You can pay yourself dividends from the company, out of its profits. Both of those even.

 

[MyAccountantOnline]

Have a read of this https://www.gov.uk/hmrc-internal-manuals/employment-status-manual/esm4022

and also consider and check out IR35

 

[NicoJ]

and also consider and check out IR35

I may be reading the question incorrectly as I didn't think IR35 was an issue? He's self-employed as a web designer not a company? Or do I have that completely wrong?

 

[MyAccountantOnline]

I may be reading the question incorrectly as I didn't think IR35 was an issue? He's self-employed as a web designer not a company? Or do I have that completely wrong?

It's his limited company too so he has to consider the employment status of anyone engaged to perform work for the company.

 

[TheCyclingProgrammer]

It's his limited company too so he has to consider the employment status of anyone engaged to perform work for the company.

IR35 is completely irrelevant. OP is talking about a B2B supply of services from their own self employed business to a company they happen to be director of.

In what way do you think IR35 is of any relevance? OP cannot be caught by IR35 when working in a self employed capacity.

I can’t see any reason why OP cannot invoice their Ltd company for services performed that are not related to the Ltd company business or their directorship of said business. OP certainly isn’t avoiding tax by doing this as they will pay tax and NI on their self employment income. It will reduce the taxable profit of the company but that would be the case if it were paying a third party too.

 

[TheCyclingProgrammer]

You can pay yourself a wage from the company as an employee. You can pay yourself dividends from the company, out of its profits. Both of those even.

OP might be able to pay themselves dividends but they didn’t actually say whether or not they are a shareholder.

 

[MyAccountantOnline]

IR35 is completely irrelevant. OP is talking about a B2B supply of services from their own self employed business to a company they happen to be director of.

In what way do you think IR35 is of any relevance? OP cannot be caught by IR35 when working in a self employed capacity.

I can’t see any reason why OP cannot invoice their Ltd company for services performed that are not related to the Ltd company business or their directorship of said business. OP certainly isn’t avoiding tax by doing this as they will pay tax and NI on their self employment income. It will reduce the taxable profit of the company but that would be the case if it were paying a third party too.

I mean the OP's

I may be reading the question incorrectly as I didn't think IR35 was an issue? He's self-employed as a web designer not a company? Or do I have that completely wrong?

Apologies @NicoJ I misread the post you are quite correct.