Am I a director or self employed?

[Priestess5]

I’m really confused.

I decided to go from self employed to LTD company in April 2019 and my accountant left a note on my 18/19 tax return saying self employed deceased in April. But within a couple of days of making that decision something happened in my personal life which I had to come away from my business (no employers and I’m the only person)

I wasn’t putting through anything on PAYE or taught how to do it etc and any money that come in from my business just went into my personal bank.

by the time I come back to business I’d forgot I was ltd and continued as my usual self but I didn’t speak to accountant or hmrc or put anything through in PAYE as I have no access to it or any idea how to do it?

now this situation has occurred and my business has dried up of sales pretty much. I don’t know if I’m a director and should furlough or if I’m self employed and to get the June grant?

When i looked on my hmrc account looks like all along my accountant has been submitting that I have £719 wages a month on PAYE which isn’t true? These aren’t figures I’ve submitted at all.

I had submitted my self employed accounts for 16/17 17/18 18/19

Could anyone help clarify if I’m classed as Director or SE?
If I’m a director what should I be doing about these £719 payments his been putting through, I can’t get hold of him either.

thanks

 

[Scalloway]

any money that come in from my business just went into my personal bank.

Sounds like you were acting as self employed. What was the business name on the invoices you sent out?

looks like all along my accountant has been submitting that I have £719 wages a month on PAYE

I suspect your accountant has been trying to do you a favour. If your limyted company pays you that sum you are given credit for NI contributions without you aor the company having to pay anything. Also it creates a debt which the company can pay you at a later date when it has money to do so.

You need to get your accountant to sort out the limited company.

 

[Priestess5]

Sounds like you were acting as self employed. What was the business name on the invoices you sent out?



I suspect your accountant has been trying to do you a favour. If your limyted company pays you that sum you are given credit for NI contributions without you aor the company having to pay anything. Also it creates a debt which the company can pay you at a later date when it has money to do so.

You need to get your accountant to sort out the limited company.

My business isn’t invoice based, it’s an online business that sells digital content on a platform and the money is paid into my personal bank.

I’ve never even had access to PAYE or was told anything about it.

 

[Scalloway]

Then you'll need to take it up with your accountant.

 

[paulears]

all your customers get a receipt for their payment, so you ARE providing invoices that say digital download of XXXXX £1.50, paid via paypal. That's a sale. In your accounts you are listing these sales and marking them paid. When I did lots of ebay sales, once a month I added up the sales and invoiced them on the system, to clear the money paid into the bank account - that tidies the accounts up. If you don't do this your income appears higher than reality.

 

[Priestess5]

all your customers get a receipt for their payment, so you ARE providing invoices that say digital download of XXXXX £1.50, paid via paypal. That's a sale. In your accounts you are listing these sales and marking them paid. When I did lots of ebay sales, once a month I added up the sales and invoiced them on the system, to clear the money paid into the bank account - that tidies the accounts up. If you don't do this your income appears higher than reality.

The platforms I work on don’t work in the same way. I work within the adult industry and the customer tops up money on their account, that invoice or receipt is from the platform with their details, I have zero access to that transaction. Then the customer spends their money in the account on various models on that platform.

On my account all I see is the customers username and what they’ve clicked to purchase and the amount I get from the sale.
Nothing is addressed to the LTD company.

 

[Scalloway]

If nothing is addressed to your limited company then I would say you are self employed.

 

[Newchodge]

If nothing is addressed to your limited company then I would say you are self employed.

Which could be an issue if the accountant has been submitting RTI's.

 

[Priestess5]

If nothing is addressed to your limited company then I would say you are self employed.

Which could be an issue if the accountant has been submitting RTI's.

yeah I am self employed. I had forgot I’d even went LTD.
but my accountant has been putting through that I’m making £719 on PAYE which I didn’t know or agree to these figures.

Some months i hasn’t even sold £719 worth as a whole due to breaks I took away.

 

[paulears]

Without any VAT issues then surely you just invoice the people who pay you regularly and don’t send the invoice? Mark it paid when you issue it because you used the payments for the invoice total.

 

[Priestess5]

Without any VAT issues then surely you just invoice the people who pay you regularly and don’t send the invoice? Mark it paid when you issue it because you used the payments for the invoice total.

As mentioned previously there are no invoicing on my end. I’m an adult performer working on multiple adult platforms where the customer tops up their account on the platform and then the customer uses those funds to spend on whichever models he wants.
He may top up £100 in total but only spend £10 on me.

I have zero access to the personal information of these customers, not their names or addresses etc.

 

[Newchodge]

The only possible way to sort this out is to speak to your accountant. Which will have to wait until Tuesday as it is easter weekend. Have you been sending your accountant your income and expense figures?

 

[Priestess5]

The only possible way to sort this out is to speak to your accountant. Which will have to wait until Tuesday as it is easter weekend. Have you been sending your accountant your income and expense figures?

No I haven’t been sending them, didn’t know I had to.

 

[paulears]

I’m really sorry to say I find it laughable you forget your status. If you are self-employed or an employee taking a PAYE wage, you probably should have noticed. Who fills in your self-assessment? That person would need to know details. If it's your accountant - how do you expect them to do it accurately!

 

[Priestess5]

I’m really sorry to say I find it laughable you forget your status. If you are self-employed or an employee taking a PAYE wage, you probably should have noticed. Who fills in your self-assessment? That person would need to know details. If it's your accountant - how do you expect them to do it accurately!

Laughable? Well you can laugh all you want but I personally hit an extremely difficult life situation which involved severe mental health issues so forgive me if my taxes and business was the last thing on my mind.

My accountant has always done my self employed tax returns to which I’ve always given him my figures. But from April 2019 where I registered as LTD and he set up a PAYE account for me, very shortly after my life was turned upside down to which I was barely working and when I did it was minimal and by the time my life was in a better situation 9 months later I’d forgotten all about setting up as LTD and just continued as normal. My accountant in that time hasn’t said anything to me or asked for any figures but has been putting down £719 a month on his own merits.

 

[Mr D]

Laughable? Well you can laugh all you want but I personally hit an extremely difficult life situation which involved severe mental health issues so forgive me if my taxes and business was the last thing on my mind.

My accountant has always done my self employed tax returns to which I’ve always given him my figures. But from April 2019 where I registered as LTD and he set up a PAYE account for me, very shortly after my life was turned upside down to which I was barely working and when I did it was minimal and by the time my life was in a better situation 9 months later I’d forgotten all about setting up as LTD and just continued as normal. My accountant in that time hasn’t said anything to me or asked for any figures but has been putting down £719 a month on his own merits.

Which is what an accountant would do when dealing with a limited company payroll with you as a director and employee.

Whether the business earns that in a month or not the payroll gets done. And while you won't pay taxes on it, any money you didn't receive of that payroll money you can later take out of the business tax free.

Check up on your business at companies house, it will give details of when you have to have accounts submitted. Your accountant will need details of the company income and expenditure.
He already knows one item of expenditure, the payroll.

 

[Newchodge]

Is your business affected by Covid-19? It sounds like the kind of business that would be able to carry on as normal.

 

[paulears]

I find out difficult to believe you not talking to the accountant is all his fault? When you set up the company - surely you talked to the accountant and agreed how it would work? Surely you were made aware back then of the requirements of company accounting and how salary and dividends work - This is what I find laughable - you MUST have given permission for these things to have been done, and they have been doing them, and by what you say, they've done them with your nest financial interest at heart. You've been working for the year, earning money - yet each time some came in, you forgot you were no longer a sole trader? I empathise about your mental state - but you have been working, so this is why I find it difficult to accept your forgetfulness. Get in and talk to the accountant - urgently, or at least, phone them up rather than ask strangers. If your mental health is fragile then the last hing you want is the stress of making things worse. If money comes in, you do things with it - for that you need to do basic bookkeeping at the very least? You are delivering your media digitally, so is that a business internet or a private account? Are you claiming these things as expenses? all this suggests you have been switched on enough to operate, but ill enough to forget? Almost every day, I get an email that is business related and has my trading details on it - how come you got nothing addressed to XYZ Ltd, and didn't go who?

 

[Priestess5]

Which is what an accountant would do when dealing with a limited company payroll with you as a director and employee.

Whether the business earns that in a month or not the payroll gets done. And while you won't pay taxes on it, any money you didn't receive of that payroll money you can later take out of the business tax free.

Check up on your business at companies house, it will give details of when you have to have accounts submitted. Your accountant will need details of the company income and expenditure.
He already knows one item of expenditure, the payroll.

Problem is in this situation with coronavirus it’s screwed me over, because if I furlough myself 80% of £719 which isn’t even an accurate figure I’ve given. That’s an amount my accountant has decided to put on there.

My last 3 tax returns including 18/19 was as a sole trader that’s the box that was ticked. A tax return has never gone in for LTD as it was only registered in April 2019.

So I’m unsure if I would be classed as self employed or director. and if I’m classed as director would hmrc allow me to give them my accurate PAYE amounts rather than the ones his put in.

Because in Feb 2020 he put in £719 where as my actual PAYE amount would have been £3400

Is your business affected by Covid-19? It sounds like the kind of business that would be able to carry on as normal.

Yeah, it’s dead.

 

[Priestess5]

I find out difficult to believe you not talking to the accountant is all his fault? When you set up the company - surely you talked to the accountant and agreed how it would work? Surely you were made aware back then of the requirements of company accounting and how salary and dividends work - This is what I find laughable - you MUST have given permission for these things to have been done, and they have been doing them, and by what you say, they've done them with your nest financial interest at heart. You've been working for the year, earning money - yet each time some came in, you forgot you were no longer a sole trader? I empathise about your mental state - but you have been working, so this is why I find it difficult to accept your forgetfulness. Get in and talk to the accountant - urgently, or at least, phone them up rather than ask strangers. If your mental health is fragile then the last hing you want is the stress of making things worse. If money comes in, you do things with it - for that you need to do basic bookkeeping at the very least? You are delivering your media digitally, so is that a business internet or a private account? Are you claiming these things as expenses? all this suggests you have been switched on enough to operate, but ill enough to forget? Almost every day, I get an email that is business related and has my trading details on it - how come you got nothing addressed to XYZ Ltd, and didn't go who?

The communication with my accountant hasn’t been great, on my part and his. When I decided to go LTD all I was told is there is a PAYE system (which I have no access to) and that I was to pay myself a wage each month. But because things went badly in my personal life I was just using all the money that entered my bank account to live on.
I wasn’t told to report any figures, just told to document all my income and outgoings like normal.

Absolutely nothing Is address in the LTD name, not my bank, not my payee details on any of the platforms that I work on. It’s all been in my personal name, I don’t even have a business bank in LTD just my personal bank and a business bank with Barclays which is still in its sole trader status.
So at no point in the last year have I come across anything relating to the LTD company.

The penny didn’t drop until this coronavirus situation come up and again I assumed I would be on the self employed list but then when reading on here I remembered that I had registered as LTD last year but then I thought well I’ve not been doing PAYE so I won’t class as a director. I logged into my hmrc account last night and saw PAYE things on there and the amounts he has been submitting.

 

[paulears]

Well, as a newly started self employed person you get very little, but as a furloughed director you do - so 80% of what he notified sounds pretty good?

 

[Priestess5]

Well, as a newly started self employed person you get very little, but as a furloughed director you do - so 80% of what he notified sounds pretty good?

I’m not newly self employed. I’ve been SE for 3 years. So all three years tax returns are on file including 18/19. Which would have meant 80% would be around £1500 per month.
The amount he notified was £719 which would be £580 ish a month.

I’m awaiting to speak with him to figure out where I stand.

 

[Newchodge]

The 719 is the amount that a director can earn without haveing to pay any national insurance contributions, while still getting credit towards the state pension. It is the figure that a huge number of ltd directors take as salary. The rest of their income is made up of dividends, issued from the profits of the company.

I am afraid that the chance of being able to claim that the figure should have been 3400 per month for the last 12 months are zero. If you did change it you would have to pay a large amount in tax and national insurance.

 

[Ian J]

Is your business affected by Covid-19? It sounds like the kind of business that would be able to carry on as normal.

Priestess5. Newchodge has made a valid point that you haven't answered

 

[Priestess5]

Priestess5. Newchodge has made a valid point that you haven't answered

I answered Newchodge in post #19. Yes, sales are dire.

 

[Mr D]

Problem is in this situation with coronavirus it’s screwed me over, because if I furlough myself 80% of £719 which isn’t even an accurate figure I’ve given. That’s an amount my accountant has decided to put on there.

My last 3 tax returns including 18/19 was as a sole trader that’s the box that was ticked. A tax return has never gone in for LTD as it was only registered in April 2019.

So I’m unsure if I would be classed as self employed or director. and if I’m classed as director would hmrc allow me to give them my accurate PAYE amounts rather than the ones his put in.

Because in Feb 2020 he put in £719 where as my actual PAYE amount would have been £3400



Yeah, it’s dead.

£719 figure must be accurate, its what your accountant has put through.
Whether you receive the entire sum each month or not is up to you. Some directors choose to take little or none of that kind of sum, saving the money in the business until later when they can get it out tax free anyway.

If you have to stop work is 80% of £719 better than 100% of whatever universal credit will give?

The Limited company will have accounts due later this year. Not cheap and to be honest not something most directors can do themselves - you pay an accountant several hundred pounds or more to submit accounts.

Your accountant and presumably therefore HMRC will see you as a director.

Your actual PAYE amount is £719. If you had £3400 profit from self employment that is another matter - and one you would pay tax of quite a bit on.
By all means get the accountant to correct your PAYE figures - first figure out what sort of business you are running.
PAYE is limited company for you - not self employment.

 

[Beyond]

Your accountant has been doing your PAYE payroll for you at £719 a month, so your are a director of the company and an employe, you will be able to claim 80% of £719 a month by furloughing yourself, when it come live at the end of april, and you can back date your claim to March 3rd

 

[Newchodge]

Your accountant has been doing your PAYE payroll for you at £719 a month, so your are a director of the company and an employe, you will be able to claim 80% of £719 a month by furloughing yourself, when it come live at the end of april, and you can back date your claim to March 3rd

You can backdate your claim to the later date of the date you were first furloughed (the date to be confirmed in the written agreement which can be produced after the date of furlough but before any claim is made for the grant) or 1 March.

 

[NicoJ]

From the information given you are still operating as a sole trader so you may still be able to get the self employed grant.

You may be able to get 80% of the director salary as well.

As the above posters have mentioned though you need to square this up with your accountant. If the ltd was set up in April then your accounts will almost certainly go to the end of this month.