Tax and NI

2. Are You Self-employed?

A self-employed person can enjoy significant tax and National Insurance advantages over a company employee (see 4 and 13).

2.1 You are self-employed if you are your own boss and trade as a sole trader or as a partnership.

• If you trade as a limited company, you, as a shareholding director, are an employee of the company. You are not classed as self-employed.

2.2 Some people who work full-time for a single company call themselves consultants, or contractors, and claim to be self-employed. A tax inspector is unlikely to treat you as self-employed unless you can demonstrate that 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.