How is PAYE & NI paid in a limited company?
If you set up as a limited company, you will be a director. Company directors are company employees, and are treated as employees of the company for pay and tax, which means you would be responsible not only for this, but Corporation Tax on the company as well. You would pay the tax and NIC straight to the Collector of Taxes (or whatever they call themselves these days) monthly. There would be an annual Tax Return on yourself, and one on the company. I don’t like the sound of this agency. Before you commit, either ask to see the Status Inspector at your tax office, or a financial adviser. In this set-up, you will not be entitled to any sick pay or holidays. You will have to do annual company accounts, and keep a lot of extra meticulous paperwork. You will not have a legal employer, and no come-back if anything goes wrong. You would have to invoice the agency for whatever work you do. Your drawings would come out of what agency pays you, no wages, no regular income. I take it they set t
