Is it possible for me to work both for a
company and for myself?
Being employed and self-employed is a common occurrence, therefore the quick answer is yes.
Let's take a look at a few scenarios.
Working full-time and working for yourself on the side
For example, Rebecca works full-time for TaxScouts but also uses PeoplePerHour to design
software for her own clients; she must register as self-employed and pay tax on this revenue.
What you'll need to do is check if you need to register as a sole trader with HMRC,
double-check your tax code, and file a personal tax return for your self-employment income
every year.
Employing the services of an umbrella firm
An umbrella company is a company that hires freelancers as employees:
● It is paid for by your client in exchange for your services.
● The umbrella company gives you a salary and handles your taxes through the PAYE
system.
What you must do is:
● Check with your umbrella company to see if they will pay your taxes.
Uncertainty over whether you're an employee or a subcontractor
What you must do to determine whether or not you are an employee:
● Request a payslip from your employer
● check your status with HMRC online.
Setting up your own limited liability company
In this instance, you are both a shareholder ("shareholder") and a director ("director") of your
own company, yet you are not self-employed.
What you must do is file an annual corporate tax return; the corporation will pay tax on its profits
first (minus costs, including salaries)
If your dividends are over £10,000, either pay yourself a salary (and pay PAYE taxes) or an
annual dividend (and pay dividend tax), or both, and file a personal tax return.