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As being self-employed, can I invoice my self-own non-VAT Limited company (used for IT contracting)?

If so, in what circumstances (e.g. making my own Ltd company website)?

  • That is an expense(building a website), why would you invoice it ? If it is a genuine business expense it will go in expenses. – DumbCoder Aug 26 '15 at 7:56
  • @DumbCoder It's more tax convenient, as I could use my tax-free personal allowance, so I'm asking if it's possible, if so - under which circumstances, so it doesn't look fishy. – kenorb Aug 26 '15 at 8:28
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    You probably will be red flagged, check the first 3 links google.co.uk/… – DumbCoder Aug 26 '15 at 8:33
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    You are the company director. You can pay the company director a salary below the tax free allowance. You gain nothing by invoicing your company as well. Tax free allowance is per person, not per role. – gnasher729 Aug 27 '15 at 21:03
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    If a director is corporate entity (company 1 lets say) ( there is a natural director as well) can that Limited company invoice the limited company(company 2) for work done The director undertakes other work from his limited company as well as work in company 2 – Michael Parnell Oct 8 '18 at 13:12
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Sure you can. Obviously it means your company will make less profit, saving you 20% corporation tax, while your personal income will be higher, meaning you will likely spend more than 20% in income tax and National Insurance contributions.

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No, as a director normally you can't.

As a director of a Limited company, all those payments should be accounted for as directors' remuneration and have been subject to PAYE and NIC, even if you are self-employed.

Currently there is no legislation which prevents a director from receiving self-employment income from a company in which he is a director, however the default position of HMRC's is that all the payments derived from the directorship are subject to PAYE.

In other words, it's possible only invoice from an unconnected business or in a consultancy role that's not directly related to the trade of business.

But it really depends on the circumstances and the contracts in place.

Sources: Monsoon at AAT forum, David Griffiths at UKBF, Paula Sparrow and Abutalib at AW


More sources:

If a person does other work that’s not related to being a director, they may have an employment contract and get employment rights.

Source: Employment status as director at Gov.uk

In principle, it is possible for an employee or office holder to tender for work with their employer outside their normal duties, in circumstances where that individual will not be providing service as an employee or office holder but as a self-employed contractor.

Where there is any doubt about whether service is provided constitutes employment or self-employment, see the Employment Status Manual (ESM).

Source: Section 62 ITEPA 2003 at HMRC

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