Tax and NI

2. Are You Self-employed?

People who are self-employed can benefit from significant short-term tax and National Insurance advantages compared with company employees (see 3 and 10).

2.1 You are self-employed if you are your own boss and trade as a sole trader or member of a partnership. To convince HM Revenue & Customs, you must at least show you:

• Control what you do, and how and when you do it.
• Have more than one customer.
• Bear an element of business risk.
• Have a right of substitution.

2.2 If you trade as a limited company, you will be an employee of the company.

• This also applies to shareholding directors.

2.3 If the company contracts your services to a single client, who would otherwise employ you, it will probably be classed as a personal service company.