I am currently looking into the possibility of doing some accountancy contract work through an agency and wonder if anyone could clarify something for me. I currently run a property marketing website and as such am self employed (registered with HMRC as providing accounting & marketing services) and as such pay Class 2 NI quarterly and subsequent to filling in a self assessment tax form each year, pay income tax and Class 4 NI on my profits.

I am aware that some contractors invoice agencies through a limited company and as such the agency do not pay their National Insurance (Employer NI nor Employee NI) as they would do for PAYE employees. This being the case, the contractor is able to charge a higher rate on his invoice (for the ER-NI portion), with the added benefit of receiving lower taxed dividends through a company as opposed to salary (a mix most likely). Does anyone know whether this applies equally to someone in my situation who is self employed and accounts for his own national insurance in the same way? Is it permissable for me to charge myself out a higher rate or is this likely to be constrained to limited company contractors? Thanks for any advice.