Self employed or Limited company

[JM85]

Hi everyone, just after a bit of advice as I'm not really clued up on this sort of thing.
I'll try and keep it short. Basically a company in Spain is looking at me doing work for them on a very regular basis. I'd still be based in the U.K but would head over there as and when I'm required. I would be running jobs for the company, working in the marine industry, so at times I would need to hire one maybe two other people to work alongside me. Just wondering if I'd be better off setting up a limited company or just being self employed. I have zero experience in either and it all appears pretty daunting so any help with this would be hugely appreciated.
Thanks in advance.

 

[STDFR33]

It seems as though you would really be acting in an employment capacity?

 

[JM85]

It seems as though you would really be acting in an employment capacity?

Sorry I'm not entirely sure what you mean. Apologies if that's just me being a bit thick!

 

[STDFR33]

Should you really be treated as an employee, rather than self employed?

 

[JM85]

The company have said they would prefer it if I went self employed or down the limited company route. I presume it'll be easier that way with me living in the U.K and not having work all the time with them.

 

[STDFR33]

It's not a matter of choice.

Start here:
https://www.gov.uk/guidance/employment-status-indicator

 

[JM85]

Came out as self employed after using the tool.

 

[STDFR33]

As for sole trader v limited company...

What are your projected net profits?
Is limited liability important?
You you prefer to keep our legal compliance to a minimum?

 

[JM85]

Pretty difficult to give a projected net profit as its all dependent on the amount of contracts the company gain. With it being a new company (the Spanish one) it's hard to predict.
Limited liability is not something massively important (I have very little knowledge about it). With regards to the legal compliance I would be hoping a good accountant would take care of that side of things!

Thanks for taking the time to reply and sorry if it's like talking to a 6 year old for you, really out of my depth with this at the minute.

 

[STDFR33]

Ha! No worries at all.

A limited company is generally more tax efficient if you are expected to generate profits exceeding ~£25k.

Whilst you say limited liability isn't important, you may have assets now or in the future that you wish to protect?

If you don't need to extract all the profits to live, you can keep profits in the company and so won't be taxed (the company will still suffer corporation tax on profits). Whereas a sole trader you will be taxed on all the profits in the year they are made.

There are a number of other considerations, and I think you would benefit from having an initial consultation with a few accountants (it's generally free for the first meeting).

 

[JM85]

Yeah I think that needs to be my next stop.
I appreciate the help and the information. Thankfully I've got a fair bit of time to sort it.

Cheers.