Any Self Employed / Limited Company Employee got FLR(HSMP)?

[Jk2007]

Any Self Employed / Composite Limited Company Employee got FLR(HSMP) under the new rules so far?

[JD__]

Yes. I applied as self employed as I run my own Limited Company. (Intital approval but same system for FLR anyway)

It was approved and retured within 1 week.

JD

[aj_sp_007]

hi jd..
i', would like to apply as a self employed but at the same time very scared ... what if they only prefer salaried. anyways what documents u submitted .... how is the verification done in this case...

please help in real mess....

aj_sp_007
________
Halfbaked

[Dawie]

Yes. I applied as self employed as I run my own Limited Company. (Intital approval but same system for FLR anyway)

It was approved and retured within 1 week.

JD

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

[LondonBlonde]

Yes. I applied as self employed as I run my own Limited Company. (Intital approval but same system for FLR anyway)

It was approved and retured within 1 week.

JD

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

Dawie, I think you are wrong. If you own the ltd. company you are still self employed. Yes, a limited company is a legal entity, however this will not hold with the HO. They will not be impressed by your attempts to appear as an employee of your own company. The whole idea of the scheme is to figure out how profitable you or your business are. They will not be interrested in what you are willing to pay yourself.

JD, you would be wise to contact HO to clarify. If you are still unsure, I advise you to play it safe and apply as self employed. If your income doesn't satisfy the 75 points, take the transitional self employment provision.

Good luck to you - LondonBlonde

[Dawie]

Yes. I applied as self employed as I run my own Limited Company. (Intital approval but same system for FLR anyway)

It was approved and retured within 1 week.

JD

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

Dawie, I think you are wrong. If you own the ltd. company you are still self employed. Yes, a limited company is a legal entity, however this will not hold with the HO. They will not be impressed by your attempts to appear as an employee of your own company. The whole idea of the scheme is to figure out how profitable you or your business are. They will not be interrested in what you are willing to pay yourself.

JD, you would be wise to contact HO to clarify. If you are still unsure, I advise you to play it safe apply as self employed. If your income doesn't satisfy the 75 points, take the transitional self employment provision.

Good luck to you - LondonBlonde

I'm not really interested in what makes the Home Office happy. All I'm saying is that from a tax perspective being self-employed and working through your own limited company as the sole director and employee are two completely different things.

Being self-employed means that you invoice your clients in your own personal capacity as a sole-proprietor. All money you collect as a self-employed person usually goes straight into your personal bank account and at the end of the tax year you fill in a self-assessment tax return and pay personal income tax and national insurance contributions on all the money you've earned.

Working through your own limited company means your limited company invoices your clients and the money is paid into your business bank account. Throughout the tax year you pay yourself a small PAYE salary and draw the rest of your income through dividends. At the end of the tax year your company pays corporation tax of 19% on your profits (your income less any business expenses). You as an individual are taxed completed seperately from your business.

In any case, it is accepted practice for freelance and contract workers to use their own limited company as a financial vehicle and I very much doubt this will even be an issue for the home office.

[JD__]

Dawie, I agree that being Director/Employee of your own comapny is not the same as self employed in other contexts (i.e for tax purposes), but not in the case of the HSMP application. As the (sole) owner, director, employee of a Limited Company the only way you may be able to prove earnings is via the Self Employed section of the application as you do not necessarily pay your self as a salaried employee, and may not pay yourself at all(in salary or dividends) and retain your earnings in your company. So you need to demonstrate earnings from the business that are attributable and available to be, or have been distributed to you in the previous 12 of 15 months. This can only be done through your company's management accounts, tax returns and in my case verified by a letter from my accountants as additional support. This is why these are the required forms of evidence in addition to personal tax returns, bank statements in this section.

This is similar to what was required under the old scheme except that now they have given you 1 of 3 categories to pigeon hole your past earnings into.

At the end of the day you need to demonstrate your earnings adequately to support the points you are claiming, and each individual will have different circumstances and need to read the guidance notes and prepare accordingly.

JD

Yes. I applied as self employed as I run my own Limited Company. (Intital approval but same system for FLR anyway)

It was approved and retured within 1 week.

JD

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

[LondonBlonde]

So, thus far no one has applied for FLR-HSMP (under the new rules) as an employee of their own ltd. company? This was my point - I think anyone who does risks having their application rejected.

These explanations of 'what is a limited company' may be confusing people. They are only looking to successfully apply for FLR-HSMP.

[ajani]

LondonBlode,
JD posted above to say he received his extension as a Self employed using a limited liability company.

[LondonBlonde]

LondonBlode,
JD posted above to say he received his extension as a Self employed using a limited liability company.

Exactly, self employed. Not an employee of a limited company as dawie suggests;

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

[Dawie]

LondonBlode,
JD posted above to say he received his extension as a Self employed using a limited liability company.

Exactly, self employed. Not an employee of a limited company as dawie suggests;

If you run your own limited company and are a director thereof you are, in fact, not self-employed at all. You are an employee and director of your own limited company. There is a big difference between being self-employed on the one hand, and being the owner/director/employee/shareholder of your own limited company.

Let me clarify...I am not suggesting that the Home Office will not consider you self-employed if you are running your own limited company. Quite the opposite.

All I am saying is that it is important for everyone to understand that the Home Office's definition of self-employed is different to Inland Revenue.

[Jk2007]

Guys,

Does this mean that if we operate through a limited company (not owned), should we provide proof to HO that we don't own the company in order to claim as employee?

[badhorse]

Guys,

Does this mean that if we operate through a limited company (not owned), should we provide proof to HO that we don't own the company in order to claim as employee?

What do you mean by "operate through"?

I think you ARE still an employee even if the company that employs you is in fact owned by you.

I think to prevent every one from settin up an Ltd and signing an employment contact with him/herself (and then claim to have a job and apply for HSMP extention), the HO demands the accounts etc to see if the business is really bonafide.

I hope my understanding is right.