Can I be a Director and Self employed?

[Ross D]

My business partner and I are on the brink of registering our business as a Limited company - offering services in Music tuition for both classical and contemporary instruments. We have no employees as all tutors are outsourced self-employed musicians. All payments for services go through the company and are then paid out to tutors. No salary will be taken by us at this time and all profit will go into growing the business.

As I understand it, as a Director, I will be employed by the the company and must be paid (when the time comes) either through the PAYE system or Dividends or both.

heres where i get confused

We are also self employed musicians, tuition being one avenue of income, and we will be using our business to find students and fill up our timetable. This is how we will make money until the business can support us.

so the question is....

Can I still be a registered self employed musician and also a Director of a business at the same time?

Do I pay myself through the PAYE system as an employee? or can I bill the company for my services and fill out a self assesment as a self employed musician?

hope someone can shed some light on this matter

Many Thanks

 

[IANL]

The answer is yes.

I am both director of my own business but also self employed in another area of the business.

I own a photographic business (ltd company) I am also a self employed photographer.

You need your accountant but it is perfectly acceptable to be two thigs

The difficulty is if you want to invoice your own business for services. It can be done but you have to be careful

 

[Ross D]

Brilliant!

Thankyou, just the response I was hoping for. Very similar circumstances.

Will get an accountant involved.

What problems arise from invoicing?

Thanks

 

[IANL]

My company cannot be my only customervfrom a self employed perspective for one..

There are other things but i can't recall right now. I will make a further post when they come to mind

Best

Ian

 

[Ross D]

Thanks Ian

Will do some investigating.

 

[Simply Clicks]

Are there any updates or further advice on this?

I was reading in the Sunday Times about footballers and others being employees as footballers and directors of companies when it comes to the revenue from their image rights.

This set-up means they pay 40% tax on their income from playing football but drawn down (virtually) tax free loans from the companies that control their image rights.

 

[bennyt]

Hi,

Realise this is an older post but have a similar setup with a music tuition agency and would be interested to know whether your teachers have to be classed as employees or self employed and how you came to the decision as to which they were?

On another note would be interested to know how you find competing in this field having to charge VAT to the customer and not being able to claim it back from the payment made to the teachers (that is assuming your company is VAT registered and your teachers are not).

The employement/self employment aspect and VAT issue are presenting considerable hurdles for us in getting started at this time.

Any words of advice from your experiences?

Many thanks,

Ben

 

[Deleted member 240728]

Does anyone know, how the setup would be if you are Self-employed in the UK but own a company in another European country?

 

[Bob]

Yes, you can become director and also work as self employed at the same time. You just need to be careful that you can do both duties efficiently.

Hopefully he has sorted the problem by now as he posted the query in 2011

 

[Dave the rave]

Let's say I am a director of a company. Is it acceptable to invoice your own company and act as self employed sole trader ?

 

[john1989]

It depends. What are the circumstances?

 

[Dave the rave]

It's a funny one. The company generate insulation leads and carries out energy assessments. My mate carries out the assessments. I'm sure he bills the company for the assessments as a sole trader and not employed

 

[Bob]

You can't invoice the company for services you provide as an office holder

 

[Bob]

Is it his only customer?

 

[Dave the rave]

His company basically only has one customer who he provides insulation leads and energy assessments to.

 

[Dave the rave]

You can't invoice the company for services you provide as an office holder

That's what I thought, so if you are a director of a company you are not allowed to invoice them for services ?

 

[Bob]

In that case, I can't really see why he would want to subcontract. Better to just pay by low salary and dividends?

 

[Bob]

An example. An individual is director of a company renting out property. He also has a building firm as a sole trader which acts for many customers. He could invoice the company for repairs that he carried out as that would not be directly related to his position as an office holder.

 

[john1989]

Bob, my thoughts exactly.

The reason for my post was that if the ltd was insolvent, it would probably be seen as an illegal distribution.

 

[Dave the rave]

That makes sense....