As director, can I invoice my self-owned company?

Question

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)?

Answer 1

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}

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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}

Answer 2

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.