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Alright so I am currently working in a UK company and I am making a stable 2,500$ monthly from it and because 99% of my work is done online, I am not physically in the UK and I am home with my family. I contacted my manager/boss and he said that he will confirm with the Home Office that I am legally self-employed in the company and I was wondering if it was possible to get a Residency Permit with this type of job, because as he said, its a legal job in the UK like all the other. Also whats the process for requesting a residency permit and is it possible without going to the UK?

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This will be difficult. You need some kind of work visa for UK, which isn't readily granted. The fact you are working as a contractor (self-employed) makes it more complicated. If you can work as employee of the UK company, Tier 2 intra-company transfer visa may be possible.
 
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