Employed vs Self Employed

[topless_mx5]

I'm wondering if anyone here can help me.

I currently run a limited company. I will be working for a different company 3 days a week, and focussing on my own company the other 2 days.

The options are, I can either work for this company as an employee for 3 days, or I can invoice them and sub contract my services to them from my own company.

I am not VAT registered and overall earnings not be in a high tax bracket.

I understand that I can charge about 25-50% extra if I am sub contracting (due to lack of employee benefits), but I'm at a loss as to which option to go for.

From what Business Link have told me, taxation will be similar for both options. So I guess it would make more sense to go with the sub-contract option, as I will be bringing in an extra 30% or so. Or have I missed something?

[jon-]

Strictly speaking which do you fall into?

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Ta...

I'm guessing employed would be the "correct" choice.

[chevy-stu]

I'm in the same situation, and found the best solution was to be PAYE employee of the other company, carry on with your own Ltd company too separately..

[Eric Mc]

Are they taking you on as an employee? If they are, you are an employee and should be taxed in that manner.

Remember, HMRC always states that there is no choice in the matter.

If you DID use your own limited company as an intermediary to prevent you being taken on as an employee when you really should have been, your company will fall foul of IR35 regarding income received from that particular engagement.