Self-employed vs Employed

Determining employment status can be challenging so we’ve put together this simple comparison to help differentiate between self-employment and employment. It is important to get it right because it will affect how you pay taxes and manage your finances.

If you’re unsure about your status, write to us or call us with your queries and we can help you determine which category you fall into according to HMRC rules. Here are some questions we are asked frequently.

I own a limited company, does that make me self-employed?

Owners of limited companies fulfil many of the conditions for self-employment but are considered by HMRC as both owners and employees of their company.

What is my status if I am an employee and also run my own business outside working hours?

You can be both employed and self-employed at the same time. You simply need to include details of your employment in the relevant section when you fill out your annual self-assessment tax return.

If I am self-employed, does this mean I am classed as a sole trader?

Apart from being a sole trader, there are other business structures for professionals that work for themselves, such as becoming a partner in a business partnership. For this reason, it is advisable to check your status with HMRC or a qualified accountant.

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