I have a limited company in the UK that is, unfortunately, currently making a loss. The company has been loaned cash (about £2000) by myself but isn't making a profit yet and I have taken no salary from it at all.
Given this situation, I'm undertaking some part-time freelance work on behalf of another company, for which I will generate monthly invoices. My plan was to invoice this other company from myself, thereby acting as a sole trader. Regarding taxation, I would simply include this income as part of my tax return, which I'm obliged to complete anyway as director of a limited company.
Then, a friend of mine told me that I would probably be better off invoicing through my limited company rather than a sole trader because I can pay myself up until the tax threshold and then repay myself back the money I loaned the company, also tax-free. This got me thinking about whether I should basically loan my company more cash in order to further increase my tax free allowance this year.
Then again, aren't there issues with employer's and employee's national insurance if I draw a salary from my company? Does the new auto-enrolment for pensions also take effect if I start to pay myself in this way? If this is indeed the case, then I have to question whether it's worth it at the moment, for the sake of part time work and a couple of grands' worth of tax-free cash.
So, my question basically boils down to this: Is it going to be more profitable to invoice through my limited company for this part time work or will the NI and pensions obligations render it infeasible?