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Hello, if you have any questions or need further clarification after reading my answer please let me know.
I want to remain self employed, is this possible? Yes it is possible.
I have a young child and so am hoping to receive working tax credits as self employed. Can I still remain self employed whilst being a director of my own business or will I become employed? You can remain self employed and also be a director/shareholder of the LTD company.
If I am employed will I need to pay myself the minimum wage, and if my business doesn't make a profit in the first year can I choose to not pay myself a salary? You don't have to pay yourself a minimum wage and if the company has not made a profit you can choose not to pay yourself a salary.
Whereas if my business does make a profit can I take my salary at the end of the tax year or does it need to be taken per month? It is a good practice to draw a monthly salary albeit at a level where you don't pay any NIC and income tax (£625 pm for 2012-13). You can accrue a salary per month and draw money when cashflow permits . at the end of the year of when ever possible.
If you need more information please let me know.
Thank you for your information. I'm still unsure what to do next though...
How do I claim self employment while being the director? Also I have read online that to be entitled for working tax credits I will need to give myself an employment contract from my Ltd and to pay myself the minimum wage. So how would I go about remaining self employed with regards XXXXX XXXXX working tax credits?
Thank you for your response...
The requirement for working tax credit is the need to do paid work for certain number of hours a week..
you can be employed or self employed ... more information on it can be found here "What counts as work for working credit"
If you wish to remain self employed then income from your business has to be treated as self employed earnings and not credited to the Ltd company, and you should be able to demonstrate you have done the requisite hours per week. Profits would be treated as profits from self employment and reported in your tax return.