Director but also Freelance- tax advice please

mrszippyriver

Hi everyone- a little advice needed!
I'm a Director of a Limited company and submit a Self-Assessment each year through my accountant.

However, I wish to take on a short freelance consultancy project. It will bring in a few thousand but not much more. I would be staying under the 40% tax bracket. This will not be a regular thing.

I've spoken to my accountant who says I can't just invoice for the project and declare the income on my SA return as I am technically 'employed'. I was going to invoice in my personal name not my company name. 

However, my Mum is also a Director and she has additional income from property rental on her return so why can't I on mine? (We share the same accountant)

Should I set up a Quickbooks account and just do a return this way? Although I'm aware my accountant will still be doing a full SA for me regarding the income from my Ltd company... 

Are they wrong? Is there a way for this to be included in my normal return? 

Thanks in advance 

DE_612183

why don't you want to use the Ltd Company?

Marcon

mrszippyriver said:

Hi everyone- a little advice needed!
I'm a Director of a Limited company and submit a Self-Assessment each year through my accountant.

However, I wish to take on a short freelance consultancy project. It will bring in a few thousand but not much more. I would be staying under the 40% tax bracket. This will not be a regular thing.

I've spoken to my accountant who says I can't just invoice for the project and declare the income on my SA return as I am technically 'employed'. I was going to invoice in my personal name not my company name. 

However, my Mum is also a Director and she has additional income from property rental on her return so why can't I on mine? (We share the same accountant)

Should I set up a Quickbooks account and just do a return this way? Although I'm aware my accountant will still be doing a full SA for me regarding the income from my Ltd company... 

Are they wrong? Is there a way for this to be included in my normal return? 

Thanks in advance 

Income from property rental is wholly different from income relating to employment (ditto things like savings interest), assuming she receives this in a personal capacity.

Self assessment tax returns are one per person per tax year, so all your income needs to be included;  you can't just merrily start firing off different returns as the mood takes you! Look at the declaration you have to sign...  If it's genuine self employment, then you'd simply need to add and complete the relevant page on your self assessment tax return.

Go back and talk to your accountant and get them to explain exactly why you can't do what you want to do. There are two possibilities: either they haven't understood correctly and you need to explain more clearly; or you've not understood correctly and they are warning you that freelance doesn't automatically equal 'self employed'.

You do sound a bit at sea, judging from what you've asked in your question, especially the idea of sending in two self assessment tax returns. Are you sure you and your mum are meeting all your legal responsibilities as directors of a limited company? See https://www.gov.uk/running-a-limited-company

Grumpy_chap

How is the freelance consultancy project proposed to be paid?

• Will it be via an Umbrella Company?
• Will the end client put you on their payroll for a short period?
• Is it suggested that you would be "self employed" for this activity?
• Why aren't you simply putting this through your Ltd Co?

It is possible to do all of the above options and still operate the Ltd Co.  The details will vary with each option.  It is quite possible you would incorrectly (underpay / overpay) tax initially and then need to resolve through your SA return.

What did your Accountant think you were proposing that meant they advised you it cannot be done?