Getting oh so confused about being SE as well as owning a ltd company

nads

HI all,

I'm looking for some advice as I'm getting a bit bewildered about what actions I need to take before everything get hairy!

As I started doing mystery shopping in Jan 09 I filled in SE form on the hmrc website.

In Mar 09 I seutp a ltd company with regards to working at home for Arise (See Up Your Income board). The premise is that the hours I work must be paid to an actual business as opposed to me personally.

I understand that paying myself a dividend from my ltd company will be the best way frward as it's unlikely I will reach the ~5k limit set.

I'm really confused now as to what I need to do. I understand I have to fill in a tax return once a year but do I include my earnigns from the ltd company?

I'm sorry if the above is confusing btu I am really confused! Please ask and I will provide more information to clarify things!

fengirl_2

I am not sure what your are referring to with the £5k limit - maybe you can clarify as there is no limit on dividends.
You have 2 quite separate jobs - one is self employed and one is a Director of your own company which is the same as being employed.
When you get your self assessment, as well as the basic pages, you will get self employment pages and employment pages. You enter your self employed accounts details on the self employment pages and any salary you draw from your company on the employment pages. If you dont draw any salary in the year, you still need to enter 'nil'. Any dividends you pay yourself go in the man body of the return under 'dividends'.
I trust you have spoken to an accountant abuot paying Corporation Tax on the diviends and operating PAYE on any salary you draw from the company?

happyhappydays

Running a Ltd Co. almost always involves paying an accountant to produce statutory accounts and calculating corporation tax payments. Needless to say accountants don't come cheap so you need to ensure that you will make sufficient money from your business to cover these costs.

averageguy11

Mind me asking how you are handling the NI contributions...being a sole trader..presumably you are paying class 2...what about when you go ltd?