Employed and self-employed at the same time

Dannydee333

Hi,

I am employed full-time in Northern Ireland. I've recently taken a part-time freelance job with a US-based company, that I'll be doing on the side, anything from 10 to 20 hours a week (with no limit). They'll transfer money directly into my bank account. One of my questions is, which bank account should I use.

I've been doing research on how the best way to receive and declare this income will be. My home address is a registered business address with me as the director (not trading and never has been, It was registered for a failed online business attempt I made 2 years ago but the company is still technically active).

I think that for me to receive this income into my business bank account, the contract with the US company must be between them and my company. Is that correct? I think the US company may be able to re-draft my contract so that it says my company name on it, so this shouldn't be a problem (my US boss is checking this for me). Is it wise to have this money paid into my business account? I mean, can I draw money out of it? Paying myself?

What if I was to receive the payment from the US company into my personal current account? This way is probably easier, but I'm aware there are fewer tax advantages.

I just want to make sure I do this properly, and of course, in the most advantageous way for me.

Sandtree

If you are operating via your Ltd then the money must go into your business's bank account as its the one earning the money.

For your company to pay you, thats fine, but you must properly declare it as salary or dividends etc depending on your mechanism for being paid.

If you contract directly then you are self employed and your company has nothing to do with it.

It would be sensible to discuss the matters with an accountant to work out the numbers for you and advise which route is more efficient.  Depending on the monies involved and your need to get monies from the contract will determine if going via your own Ltd is worthwhile. 

Dannydee333

Thank you.

Yeah I think at least for now it would probably be best to just do it as self employed. I can figure out the potential for going Ltd later.

Would I be right in thinking that, since I'm currently directly contracted, I should have payments made directly into my own personal current account then, and not the business account?

Sandtree

Its normally against the T&Cs of a personal bank account to use it for commercial purposes but most sole traders do and banks dont say anything... outside of the banks terms there is no legal reason to need to have a sole trader business account.

Dannydee333

Awesome, thanks.

I think I'll do it this way to start with, in order to gain experience in these areas of business I've not yet ventured into.