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Self Employed and Director at the same time

Is there any issue being both simultaniously within the same industry?

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I'm planning to continue to work as a subcontractor in the construction industry, operating as self employed. At the same time I've formed a limited company to take on work as a main contractor. (Mainly due to the liability protection that this affords.)

I'm not planning to bill the limited company as a self employed worker. I'm also not doing this to avoid registering for VAT.

My question arises because my accountant seems to be pretty wary about this setup and is advising me against it.

Should I rethink this approach and put everything through the limited company? Is there any precedent for operating like this?

Advice very much appreciated!

Replies (13)

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By paul.benny
27th Jul 2020 13:23

Other than a vague unease, has your accountant explained his/her reservations?

I'd turn the question round: why do you want to split your income this way? Doing so certainly creates additional work - two sets of books, the possibility of billing or booking costs in the wrong books, two tax returns.

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Replying to paul.benny:
By Paul Crowley
27th Jul 2020 14:03

And accountancy charges higher than you are used to.

Absolutely no reason not to but a serious level of discipline needed as every subcontractor that I have had going into a company still operates as if selfemployed, EG the company bank account being used as if owned by the shareholder.

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By SteveHa
27th Jul 2020 13:53

There's no issue, but even though you say it's not a VAT thing, it wouldn't really matter. HMRC would likely treat it all as a single business for VAT purposes, and so you need to consider combined VATable turnover regardless.

However, as others have said, you are just making extra work and costs for yourself. Do it all through the company.

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By MaggieMaggie
27th Jul 2020 14:04

Thanks for the reply.

My accountant has reservations which are based on the responsibilties of a company director in company law. I'm assuming some kind of conflict of interest.

The crux of the issue for me is that I've applied for a SEISS grant as a self employed sub contractor.

One of the conditions of the grant is 'intend to continue to trade'.

So by my reckoning, if I make the call to put everything through the limited company from now on, I am accepting that I do not intend to continue to trade as self employed and would therefore be breaching the conditions of the grant and have to repay it.

Honestly can't work out if I'm being reasonable or not.

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Replying to MaggieMaggie:
By Paul Crowley
27th Jul 2020 14:14

Had not even thought of SEISS.
Stay self employed at least until March 2021.

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