Share this content
0
4
1719

Can you be sub-contracted to a company you own!

Two independant person each now have a self-employed trade.

They equally own a company in the same line of country that they are both directors of.

If they are working on projects the company is involved in can they invoice through their sole trade as any other sub-contractor would to the company and as they would to any other client. The argument being that they are being paid as consultants in cost of sales and not in their capacity as directors which is an admin role and the costs of which would be borne out of net profit, not gross?

Thanks in advance for any thoughts you may have on this.

Replies

Please login or register to join the discussion.

avatar
By neileg
20th Dec 2010 12:01

Yes, but...

Legaly there is nothing to prevent this. Convincing HMRC might be a whole different matter, though.

Thanks (0)
20th Dec 2010 12:13

Director's fees

The fact that the directors might be paid fees for acting in their admin capacity as directors does not mean that they would not also be paid as employees for undertaking the work for which they set up the company.

Thanks (0)
avatar
By Old Greying Accountant
20th Dec 2010 23:08

I have always understood that...

.. a director is not automatically an employee.

Surely if the nature of the assignment passes the self employment test as ascribed to any other contractor, that test should also apply to the director acting as a contractor, particularly if he has a large portfolio of clients of which the company he owns (but doesn't control) is but one?

What difference is there in that to someone charging accountancy fees for the preparation of annual accounts through their sole practice to the management company of the flats where they live, of which company they are also a director. 

Thanks (0)
21st Dec 2010 10:27

The difference is ...

... that the object of the company of which he is a director is to manage a block of flats and the accountant is charging for a service which is totally unrelated to that object.

The facts in your original question are that the individuals are seeking to charge the company of which they are directors for exactly the same service that it is the company's object to provide.

Thanks (0)