Employed or invoice?

chris1

For someone taking on a small part time Company Secretary role with the option of being directly employed or invoicing via an existing limited company, which would you choose?

Initial thoughts are:
Company Secretary role - would this be caught by IR35 and have to be 'employed'?

Employee would have benefits (holiday, sickness, employee rights, etc...) but would have more deductions (NI).

Any thoughts welcome!

xylophone

http://www.hmrc.gov.uk/employment-status/

"A worker's employment status, that is whether they are employed or self-employed, is not a matter of choice."

chris1

Thanks for replying, but in this case it is a matter of choice - not between employed and self-employed (which I agree is not a matter of choice) but between employed directly and invoiced via a separate limited company (which has it's own payroll etc.)

xylophone

So John Smith is employed by Aco- Bco approach Aco and ask it to supply a company secretary - Aco is, in effect, acting like an agency?

Raksha

Do you mean Company Sectretary as in an official office like Director?

chris1

Raksha wrote: »

Do you mean Company Sectretary as in an official office like Director?

Yes .

chris1

xylophone wrote: »

So John Smith is employed by Aco- Bco approach Aco and ask it to supply a company secretary - Aco is, in effect, acting like an agency?

No, John Smith is to be Company Secretary and will be paid for his time one way or another. He can be an employee or could get company A to invoice instead (via which he would eventually be remunerated).

Which would be better? Does the role of Company Secretary mean IR35 automatically forces employee status? What about the advantages of employee benefits and rights?

HappyMJ

chris1 wrote: »

No, John Smith is to be Company Secretary and will be paid for his time one way or another. He can be an employee or could get company A to invoice instead (via which he would eventually be remunerated).

Which would be better? Does the role of Company Secretary mean IR35 automatically forces employee status? What about the advantages of employee benefits and rights?

How much is this person going to be paid. You can pay £149 a week free of national insurance contributions and they would get NI credits. That's usually how it's done with directors. They get the lowest possible salary to minimize tax and NI but high enough to get NI credits and then as owner of the company they get dividends on the shares they own.

IR 35 doesn't really apply here if the person has a company that provides secretarial services.

zygurat789

THE Company Secretary is an officer of the company and, therefore, cannot be another company; also as an officer of the company HMRC will hold that any income received is for that office and hence subject to PAYE.

IR35 depends upon the operation of the (invoicing) company. How many clients, employees jobs etc. There is no reason why a company cannot perform the work of a company secretary.

So, if you want to be "the company secretary" you must be employed.
If you only want to do the work, your company is a one man band and this is the only work you will do then you will probably need specialist advice on IR35.