According to HMRC, was I self employed?

edgetrading · Nov 30, 2009, 3:12pm

I'm doing my personal tax return and am a bit stuck.

I traded via a limited company last year. I did not pay myself anything from the company during the tax year.

Do I need to list myself as self employed on my self assessment?

donaldduke · Nov 30, 2009, 4:31pm

Talk to your accountant.

But i would guess not.

You neither self employed or employed by the sounds of things.

Technically if you are a director of the limited company that is what your status is as far as filling in your tax return.

However as the company doesnt pay you, im not sure if that counts as even being employed or not? (not that it seems to matter).

shadowninja · Nov 30, 2009, 5:43pm

Doesn't matter. You're a company director, therefore an employee of the company. I've always spoken to HMRC and other relevant governmental organisation with this view in mind and have never been corrected. I think they would have picked up on it by now (incorporated in 1999).

theSheik · Dec 2, 2009, 1:49pm

yes.

advfntrader · Dec 3, 2009, 8:17am

so you dint make any money trading then ? ;-)

jaspertrademaster · Dec 3, 2009, 8:22am

I agree you should check with your accountant. It would be a pity to get in trouble from such a small matter.

donaldduke · Dec 3, 2009, 8:32am

If its the Ltd company that owns the trading account.

The OP is therefore not self employed as far as i can see.

The OP doesnt take a salary for being either the Director or the 'Trader' employee roles.

But legally you must fill in a Self Assement Return as company Company Directors must do this by law.

If the OP has no income and everything is left in company, his Tax return will be empty, he would just need to sign it.

The Ltd company has its own tax returns that must do every year.. thats where any profits will be declared.

songcon · Dec 3, 2009, 10:10am

Quote:

Originally Posted by edgetrading

I'm doing my personal tax return and am a bit stuck.

I traded via a limited company last year. I did not pay myself anything from the company during the tax year.

Do I need to list myself as self employed on my self assessment?

Your gain on trading is classified as capital gain to be reported on the Schedule D ( the same schedule with the US return). Capital gain has different rate, and is not subjected to self-employment taxes.

In the US there is a legal entity called Limited Liability Company for the benefits of shielding the tax liabilities from the owners. Any net earnings from the LLC will flow to the owner, the line on Schedule D will flow to the schedule D on the personal tax return.

LLC owners do not have to pay tax on net earnings of the LLC, it will flow to the owner, any draws from the LLC is considered as loans. There is small "corporation" which has very similar tax treatment like a LLC but you are required to pay a fair wages to you on this format of business.

To sum it up, I'm fairly sure that you're not subject to the self employment on the capital gain of your limited company. Yes, it's capital gain and will flow to your personal income tax as capital gain, and it's different than the "net income" of the limited company.

Talk to a lawyer or an accountant on the subject, it wouldn't cost you much.

Cheers,

Attached: U.K. taxers per wipikedia:

HTML Code:

Schedule D (tax on trading income, income from professions and vocations, interest, overseas income and casual income)
[COLOR="Purple"]Capital gains tax[/COLOR]

[COLOR="Purple"]Capital gains are subject to tax at the 18% (for individuals)[/COLOR] [COLOR="RoyalBlue"]or at the applicable marginal rate of corporation tax (for companies).[/COLOR]

The basic principle is the same for individuals [COLOR="Sienna"]and companies[/COLOR] - [COLOR="RoyalBlue"]the tax applies only on the disposal of a capital asset, and the amount of the gain is calculated as the difference between the disposal proceeds and the "base cost"[/COLOR], being the original purchase price plus allowable related expenditure. However, from 6 April 2008, the rate and reliefs applicable to the chargeable gain differ between individuals and companies. Companies apply "indexation relief" to the base cost, increasing it in accordance with the Retail Prices Index so that (broadly speaking) the gain is calculated on a post-inflation basis (with different rules apply for gains accrued prior to March 1982). [COLOR="DarkSlateGray"]The gain is then subject to tax at the applicable marginal rate of corporation tax. [/COLOR]Individuals are taxed at a flat rate of 18%, with no indexation relief (but subject to a limited relief for the first £1m of gains for "entrepreneurs") [4].

A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor.[1] Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.

[COLOR="RoyalBlue"]Capital gains may refer to "investment income"[/COLOR] that arises in relation to real assets, such as property; financial assets, such as [COLOR="RoyalBlue"]shares/stocks or bonds[/COLOR]; and intangible assets such as goodwill.

Many countries impose a tax on capital gains of individuals or corporations, although relief may be available to exempt capital gains: in relation to holdings in certain assets such as significant common stock holdings, to provide incentives for entrepreneurship, or to compensate for the effects of inflation.

[COLOR="Blue"]http://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom[/COLOR]

Nov 30, 2009, 3:12pm	#1
edgetrading Junior Member Member Since Nov 2008 45 Posts	According to HMRC, was I self employed? I'm doing my personal tax return and am a bit stuck. I traded via a limited company last year. I did not pay myself anything from the company during the tax year. Do I need to list myself as self employed on my self assessment?

Nov 30, 2009, 4:31pm	#2
donaldduke Legendary Member Member Since Jan 2004 1,636 Posts	Re: According to HMRC, was I self employed? Talk to your accountant. But i would guess not. You neither self employed or employed by the sounds of things. Technically if you are a director of the limited company that is what your status is as far as filling in your tax return. However as the company doesnt pay you, im not sure if that counts as even being employed or not? (not that it seems to matter). Last edited by donaldduke; Nov 30, 2009 at 4:39pm.

Nov 30, 2009, 5:43pm	#3
shadowninja Legendary Member Member Since Jul 2007 5,530 Posts	Re: According to HMRC, was I self employed? Doesn't matter. You're a company director, therefore an employee of the company. I've always spoken to HMRC and other relevant governmental organisation with this view in mind and have never been corrected. I think they would have picked up on it by now (incorporated in 1999). __________________ The markets can stay solvent longer than you can stay irrational. My sports trading challenge: http://www.trade2win.com/boards/trad...challenge.html

Dec 2, 2009, 1:49pm	#4
theSheik Senior Member Member Since Sep 2008 166 Posts	Re: According to HMRC, was I self employed? yes.

Dec 3, 2009, 8:17am	#5
advfntrader Veteran Member Member Since Mar 2008 739 Posts	Re: According to HMRC, was I self employed? so you dint make any money trading then ? ;-)

Dec 3, 2009, 8:22am	#6
jaspertrademaster Senior Member Member Since Nov 2009 136 Posts	Re: According to HMRC, was I self employed? I agree you should check with your accountant. It would be a pity to get in trouble from such a small matter.

Dec 3, 2009, 8:32am	#7
donaldduke Legendary Member Member Since Jan 2004 1,636 Posts	Re: According to HMRC, was I self employed? If its the Ltd company that owns the trading account. The OP is therefore not self employed as far as i can see. The OP doesnt take a salary for being either the Director or the 'Trader' employee roles. But legally you must fill in a Self Assement Return as company Company Directors must do this by law. If the OP has no income and everything is left in company, his Tax return will be empty, he would just need to sign it. The Ltd company has its own tax returns that must do every year.. thats where any profits will be declared.

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