Self Employed or not! Heavily confused while filing my Self Assessment...please help

hsirk

Hello fellow MSE's,

I sat to file my self assessment thinking it would be simple and fast and am now completely lost and utterly confused. I am looking for some expert guidance.

I have a primary job in the public sector and this is my main salaried employment so tax and NI are taken care off by payroll.

However, I am also the Director of my Limited Company. I am the only employee in my limited company and do not withdraw salary. I withdrew some amount in the form of dividends. I have filed my annual accounts and paid Corporation Tax with regards to my Limited Company. I used an accountant for my Limited Company tax purposes and everything is in order.

I thought I can save some money by doing the personal Self Assessment myself. Now, while filing for Self Assessment it asks me the following;

1. How many employments or directorships did you have? - 2

2. Employer 1 name: XYZ City Council
Employer 2 name: My Limited Company

3. Were you self-employed?*

Now this third question has baffled me! Do I answer Yes or No. :mad:

Can anyone shed some light on this? If I answer Yes it takes me to a lot more confusing questions and if I answer No it just accepts the dividend amounts and allows me to proceed. Am I making sense? Really desperate for help as I do not wish to input any wrong information.

Further Info: With regards to my Limited Company, I have not registered for PAYE etc as I am the only director and choose to only withdraw dividends from my profit.

John_Pierpoint

Did you invoice anyone as Mr Bloggs rather than My Company Ltd ?
if the answer in no than you were not trading on your own account and so not a sole self employed trader.
[What does My Company Ltd do? I don't think it will ever make a difference to your tax position as an individual, just asking out of interest as might your tax man]

chrismac1

Do you have dividend vouchers for the dividends? The net amount on the total of these paid between 6 April 11 to 5 April 12 goes in your return.

Even if you are doing your own return, you should make your accountant aware of what you are filing for 2 reasons:

1. A decent one will inform you of any blunders you've made, which you can correct by 31 jan 14.

2. This will avoid things happening in your limited company that you don't want to happen - for example declaring dividends which then lead to a 40% personal tax bill.

I am wary of limited company clients who tell me they are going to DIY their tax returns, because experience suggests that those who try to skimp on fees like this are exactly those clients most likely to muck up their returns.

Cook_County

As someone who pays for the public sector, I would be seriously concerned if a contract of employment permitted any employee to have a separate business at all.

That aside; it appears that you fail to understand your duties as a director. Seek professional help. Do not file without it.

hsirk

Cook_County wrote: »

As someone who pays for the public sector, I would be seriously concerned if a contract of employment permitted any employee to have a separate business at all.

That aside; it appears that you fail to understand your duties as a director. Seek professional help. Do not file without it.

I work as a Systems Administrator for a Council. My contract does not mention anything about taking up a second employment or working for myself.

Im looking for answers posted in my initial post not for more questions or concerns.

hsirk

John_Pierpoint wrote: »

Did you invoice anyone as Mr Bloggs rather than My Company Ltd ?
if the answer in no than you were not trading on your own account and so not a sole self employed trader.
[What does My Company Ltd do? I don't think it will ever make a difference to your tax position as an individual, just asking out of interest as might your tax man]

I provide IT Consultancy services, mainly SAP based. I have invoiced individuals and a couple of limited companies.

My accountant has just got back to me saying; I am not self employed mainly because I dont draw a salary from my limited company.

Pennywise

hsirk wrote: »

My accountant has just got back to me saying; I am not self employed mainly because I dont draw a salary from my limited company.

Nothing at all to do with whether you draw a salary or not. You're not self employed if you've done all your consulting work through your Limited Company. You'd be self employed if you did it under your own name - in which case the income and costs wouldn't go through the limited company.

hsirk

Pennywise wrote: »

Nothing at all to do with whether you draw a salary or not. You're not self employed if you've done all your consulting work through your Limited Company. You'd be self employed if you did it under your own name - in which case the income and costs wouldn't go through the limited company.

Thank you. Finally an answer that makes sense to me! Yes, my accountant did mention this as well.

Also, while filing it in Part 4, it asks for other information, again asking if I have recieved dividends with tax credits. Should I mention it here again? Whats confusing me is that for my primary job I have entered my income as £24500 and then for the dividends through my limited company I have entered £8000. Now at the end of the Self Assessment it only asks me to pay 60p? Is that all I owe or is something wrong?

raphael1979

Hello,

I need some help to put my mind at rest.

I started working as a courier last February but am technically self-employed so have to do tax/ni myself. I am subcontracted to a company who pay me a drop rate per item that I deliver. I use my own car for work and personal use, though mainly (90/95%) for work. I have kept all my diesel receipts but am concerned that I am spending a lot of fuel and am not sure how much i can claim. This also is the situation for paying for the vehicle, insurance, services, tax etc. Can i claim the percentage of the usage for work against tax? I hope this makes sense..

Pennywise

hsirk wrote: »

Also, while filing it in Part 4, it asks for other information, again asking if I have recieved dividends with tax credits. Should I mention it here again?

What do you mean "again" - there's only one place for dividends to be entered - which is under "dividends" in the main form. You don't put them on your limited company "employment" page because dividends aren't employment income.

hsirk

Pennywise wrote: »

What do you mean "again" - there's only one place for dividends to be entered - which is under "dividends" in the main form. You don't put them on your limited company "employment" page because dividends aren't employment income.

Once in the main form under Dividends and in Part 4 - Any other income is asks for this;

4. Fill in your return

Any other information (Page 1 of 2)


* indicates required information
If you provided your services through a service company (a company which provides your personal services to third parties), enter the total of the dividends (including the tax credit) and salary (before tax was taken off) you withdrew from the company in the tax year: £

Does this return contain provisional or estimated figures? (If yes, please provide details on the next page )*