Limited Company- Self employed staff

[Reb D]

As a Limited Company, can you hire self-employed staff or do all workers need to be employed by the company?

 

[Newchodge]

It depends. However, if you're mindset is self employed staff they are almost certainly employees.

 

[Paul Kelly ICHYB]

Cyndy is the expert!

If you can justify that they are self employed by making sure they meet the guidelines laid down by HMRC, here:

Employment status

Employment status (worker, employee, self-employed, director or contractor) affects employment rights and employer responsibilities in the workplace

www.gov.uk

However, too many people interpret these in their own favour and have a growing chance of being caught out.

 

[Reb D]

Hi, Thanks for your replies. Yes they are self employed for tax purposes, we have the HMRC document to state they will stand by the result and we ran it through several times with the varying ways they conduct their work to be sure.

So as I understand it, it's just that we can't employ ourselves (2 partners) as self employed via the company but we can some of the staff?

 

[Newchodge]

Hi, Thanks for your replies. Yes they are self employed for tax purposes, we have the HMRC document to state they will stand by the result and we ran it through several times with the varying ways they conduct their work to be sure.

So as I understand it, it's just that we can't employ ourselves (2 partners) as self employed via the company but we can some of the staff?

You cannot employ ANYONE as self employed. They are self employed. You don't employ them, you offer work, they tell you what they will charge and invoice you for the cost.

 

[Reb D]

You cannot employ ANYONE as self employed. They are self employed. You don't employ them, you offer work, they tell you what they will charge and invoice you for the cost.

Thank you. Yes incorrect wording, I do understand that.

 

[MyAccountantOnline]

Hi, Thanks for your replies. Yes they are self employed for tax purposes, we have the HMRC document to state they will stand by the result and we ran it through several times with the varying ways they conduct their work to be sure.

So as I understand it, it's just that we can't employ ourselves (2 partners) as self employed via the company but we can some of the staff?

I really would be careful with employment status it can be a very costly mistake. If you are relying on the results of using the HMRC status tool do make sure you run it again if anything changes.

Do also make sure you refer to self employed contractors as that, they aren't staff or employees.

Directors can't be self employed undertaking their work for the company. Any reason why you want to be?

 

[Reb D]

I really would be careful with employment status it can be a very costly mistake. If you are relying on the results of using the HMRC status tool do make sure you run it again if anything changes.

Do also make sure you refer to self employed contractors as that, they aren't staff or employees.

Directors can't be self employed undertaking their work for the company. Any reason why you want to be?

Hi Thank you for your reply. Yes we are very cautious regarding their employment status.

No we don't want to be self employed as a director, I was just making sure I had everything correct as the only clear guidance I could find online was that the directors would have to be employed but nothing about self employed contractors

 

[MyAccountantOnline]

Hi Thank you for your reply. Yes we are very cautious regarding their employment status.

No we don't want to be self employed as a director, I was just making sure I had everything correct as the only clear guidance I could find online was that the directors would have to be employed but nothing about self employed contractors

You are very welcome.

If you haven't aready done so do ask your accountant for advice on tax efficient salaries and look at extracting funds from the company in the most tax efficient way; generally this is a combination of salary and dividends but you have lots of options and ways you can save tax and ways your company can save tax too.

 

[WaveJumper]

The fact that you have referred self employed contractors as "staff" has a bit of a red warning light flashing in my head, are they working for you full time, what is the nature of the business