Self employed or salaried - For Tier 1 extension- Plz help

[saipuja]

Hi,

I have beed contracting for past 2 yrs and operating through my own ltd company where i am 100% shareholder. As a director of the company, I have been paying myself monthly salary and regular dividends.

What should i show myself as a self employed or a salaried person.

If i should myself as a salaried, i can get 45 points from salary and divident for which i can submit accountants letter and divident vouchers and bank statement. Is that sufficient.

Incase i am considered as self employed, what all documents do i need to show.

Thanks,

[geriatrix]

I have beed contracting for past 2 yrs and operating through my own ltd company where i am 100% shareholder.

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

[saipuja]

I am registered as an self employed with HMRC, but since I transfer myself salary and dividend as a director, can i show myself as a salaried director.
In case of self employed, what all documents do i need to submit.

[amit0277]

I am registered as an self employed with HMRC, but since I transfer myself salary and dividend as a director, can i show myself as a salaried director.
In case of self employed, what all documents do i need to submit.

Hi Saipuja,

if you 100% shareholder of your company and being paid salary and dividend then you should be categorised as Employed. But I am not 100% sure on this.

Guidance note clearly states what documents to be submitted if you are employed or self-employed. However I will list down the documents I am submitting for my renewal:

1. Letter from accountant verifying the salary and dividend.
2. Invoice Summary which states the invoice date, number, amount, date credited.
3. Business Bank statements.
4. Invoice.
5. Personal Bank statements
6. Dividend vouchers.
7. Payslips

I would suggest you to spend good time reading the guidance note.

Regards
Amit

[amit0277]

I have beed contracting for past 2 yrs and operating through my own ltd company where i am 100% shareholder.

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

From a legal point of view, one of the main differences is that a person who is self-employed bears all the liabilities in the business personally, which means that if he/she has financial difficulties and can’t pay off the creditors (for example bank loans), the creditors have the right to require the self-employed person pay off the liabilities with their personal assets.

The Limited company is quite different. It is a separate legal entity from its shareholders (such as you as a director) and you will not be personally liable for the debts of the company, but the company will be. You can familiarise yourself with the Companies act 2006 and the directors roles and duties explained inside for a general idea of what it means to be a director of a limited company.

Effectively the directory is not self employed. Did you formed a contract with your clients and your limited company or between your client and yourself?

[saipuja]

yes, i have a contract in place with my clients and my ltd company.

in that case am i employee and wht all proofs should i give.

[amit0277]

yes, i have a contract in place with my clients and my ltd company.

in that case am i employee and wht all proofs should i give.

My last comment was based on the content I found on Internet. So I would suggest you to see a solicitor to confirm the employment status and other requirements.