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Sole Director

Sole Director

Are there any circumstances under which a sole director can be self employed in his/her company under a contract for services, or is there always an obligation to operate PAYE for himself/herself?

Many thanks.

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By zebaa
18th Jun 2012 20:00

Yes...but

it is difficult & unusual, but not impossable.

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By cfield
18th Jun 2012 20:57

Quite easy actually

All the director has to do is provide a service that the company would otherwise have to outsource to someone else, such as legal or accountancy work.

However, you cannot be self-employed for acting as a director, as in this repect you are an office holder and any fees for this must be subject to PAYE.

Obviously you would have to be registered as self-employed and submit invoices, and the fees must be reasonable to qualify for a tax deduction.

Why would an owner-manager want to be self-employed as well as running their own company? To take advantage of the Class 2/4 NI thresholds, perhaps, or to use up the balance of their personal allowance if their salary is lower.

They might also have some expenses that would not be tax deductible for an employee but would be for a self-employed person (eg use of home as office).

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