So I'm currently consulting full time for a company, as a sole trader- I have NOT incorporated. I am unsure as to my correct/best employment status. Maybe I can save taxes by incorporating. Or maybe I shouldn't even be a sole trader as I am effectively an employee.
Obviously, I wish to minimise my tax payments. My understanding is that the lowest taxes (generally) are paid if I incorporate. Failing this, the next best option is to remain as a sole trader. Failing this, I need to become formerly employed. My understanding is that my taxes are very similar (small NI differences) whether or not I am a sole trader or formerly employed, but the taxes of my employer are considerably higher if I am formally employed (which my employer would like to avoid if not legally necessary).
I propose to use the brilliant form the government provides for this exact query (Check employment status for tax - GOV.UK).
When asked "What do you want to find out?" I will choose: "If the off-payroll working rules (IR35) apply to a contract". I will then find out if I am eligible to incorporate. If the answer is 'no' then I will repeat the form, but this time, when asked "What do you want to find out?" I will choose: "If some work is classed as employment or self-employment for tax purposes".
Is this the correct approach?
Also, my employer is outside the EU. Is this relevant?
TLDR:
I'm self employed. Can I save taxes by incorporating? Or maybe I shouldn't even be self employed as I'm effectively an employee?
Obviously, I wish to minimise my tax payments. My understanding is that the lowest taxes (generally) are paid if I incorporate. Failing this, the next best option is to remain as a sole trader. Failing this, I need to become formerly employed. My understanding is that my taxes are very similar (small NI differences) whether or not I am a sole trader or formerly employed, but the taxes of my employer are considerably higher if I am formally employed (which my employer would like to avoid if not legally necessary).
I propose to use the brilliant form the government provides for this exact query (Check employment status for tax - GOV.UK).
When asked "What do you want to find out?" I will choose: "If the off-payroll working rules (IR35) apply to a contract". I will then find out if I am eligible to incorporate. If the answer is 'no' then I will repeat the form, but this time, when asked "What do you want to find out?" I will choose: "If some work is classed as employment or self-employment for tax purposes".
Is this the correct approach?
Also, my employer is outside the EU. Is this relevant?
TLDR:
I'm self employed. Can I save taxes by incorporating? Or maybe I shouldn't even be self employed as I'm effectively an employee?
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