IT Contractor going back permy... anyone done the same?
Discussion
Afternoon all!
I've been contracting in IT just over a year. It's been good fun so far, but I've been offered an excellent opportunity of permanent emplyment which I'd be daft not to take.
So, the last time I hinted that I might go permy my accountant (SJD) were quite a bit scare monger-y in the costs of closing down a company/going back to permanent employment. I think that was more to do with me not being with them longer than a year (as I was contracted to), but I'm going to hold off contacting them for a couple of days until I sign the permy contract...
Now as per ever with this kinda of thing, I turn to you PH, to guide me!
Company is just over a year old, does it really NEED to be closed down? What are the costs involved with doing this, if so?
If anyone has done this themselves and can share their experience, and some do's and don'ts, that would be grand!
Cheers all,
Dan
I've been contracting in IT just over a year. It's been good fun so far, but I've been offered an excellent opportunity of permanent emplyment which I'd be daft not to take.
So, the last time I hinted that I might go permy my accountant (SJD) were quite a bit scare monger-y in the costs of closing down a company/going back to permanent employment. I think that was more to do with me not being with them longer than a year (as I was contracted to), but I'm going to hold off contacting them for a couple of days until I sign the permy contract...
Now as per ever with this kinda of thing, I turn to you PH, to guide me!
Company is just over a year old, does it really NEED to be closed down? What are the costs involved with doing this, if so?
If anyone has done this themselves and can share their experience, and some do's and don'ts, that would be grand!
Cheers all,
Dan
No it doesn't need to be closed down, but if it isn't you will need to continue to file accounts etc etc..
Does the company have a significant bank balance, as this might affect the best exit strategy.
Preparing final accounts should only cost a few hundred quid, less if it is well timed wrt your contract with SJD.
Does the company have a significant bank balance, as this might affect the best exit strategy.
Preparing final accounts should only cost a few hundred quid, less if it is well timed wrt your contract with SJD.
I've been roughly:
1996-1998 Perm
1998-2000 Contract
2000-2002 Perm
2002-2004 Contract
2004-2011 Perm
2011-current Contract
So yes, you can do this no problem.
Providing you have kept enough cash in the company to cover your VAT and corporation tax you should be able to close it easy enough.
1996-1998 Perm
1998-2000 Contract
2000-2002 Perm
2002-2004 Contract
2004-2011 Perm
2011-current Contract
So yes, you can do this no problem.
Providing you have kept enough cash in the company to cover your VAT and corporation tax you should be able to close it easy enough.
Nick Grant said:
I've been roughly:
1996-1998 Perm
1998-2000 Contract
2000-2002 Perm
2002-2004 Contract
2004-2011 Perm
2011-current Contract
So yes, you can do this no problem.
Providing you have kept enough cash in the company to cover your VAT and corporation tax you should be able to close it easy enough.
Yep, I haven't taken a dividends recently as I had a feeling this opportunity would surface! So should be plenty there to cover the bills. 1996-1998 Perm
1998-2000 Contract
2000-2002 Perm
2002-2004 Contract
2004-2011 Perm
2011-current Contract
So yes, you can do this no problem.
Providing you have kept enough cash in the company to cover your VAT and corporation tax you should be able to close it easy enough.
UpTheIron said:
OP, have you had multiple clients / contracts over the year or so? If not you might be in for a little bit of a shock wrt to any travel expenses you have claimed...
2 contracts, both with fixed locations. I was always a bit soft on the expenses stuff anyway. All I claim is my daily mileage at the moment. Heard of people claiming all sorts of daft stuff, but tried to keep it simple.
Think it will still bite me in the ass?
I shut the company down when I went back to permanent, it wouldn't have been a lot of hassle to keep it open but I couldn't be bothered doing returns and the like indefinitely. I took a dividend to take me to the higher rate tax limit and then put the rest of the money in to a pension to avoid paying too much tax. Can't remember if the company bought the pension or if I took it as dividend and invested in pension myself though, your accountant will be able to advise on the best way though. Actually closing the company down cost next to nothing though.
6 years on and redundancy looms so I may be restarting it.
6 years on and redundancy looms so I may be restarting it.
You have a few options and you do need to discuss these with the Accountant.
1) Close the company quickly. https://www.gov.uk/liquidate-your-company/members-...
2) Run down the company over time (essential until next tax year). If it has retained earnings that would better utilised by the company.
3) The company can be made dormant, ie. not-trading https://www.gov.uk/dormant-company/dormant-for-cor...
1) Close the company quickly. https://www.gov.uk/liquidate-your-company/members-...
2) Run down the company over time (essential until next tax year). If it has retained earnings that would better utilised by the company.
3) The company can be made dormant, ie. not-trading https://www.gov.uk/dormant-company/dormant-for-cor...
Edited by 4x4Tyke on Thursday 20th October 14:12
I thought the company could only be made dormant if it had NEVER traded?
I went through the same a few years back, left the company open as it seemed the easy option at the time, then I missed the filing date and it cost me £750
Strangely enough I'm heading back in the same direction (i.e. contract to perm) again at the moment.
I went through the same a few years back, left the company open as it seemed the easy option at the time, then I missed the filing date and it cost me £750
Strangely enough I'm heading back in the same direction (i.e. contract to perm) again at the moment.
The tax rules have changed so you can now get £5k of dividend tax free each year. £10k if you have a partner who you can make a shareholder. So thats a pretty good way of running the company down.
Negotiate a rate for doing only that and no invoicing or VAT etc from a new accountants and it should be pretty cheap.
Negotiate a rate for doing only that and no invoicing or VAT etc from a new accountants and it should be pretty cheap.
Hey guys,
Had the following back from the accountant, sound reasonable? I'd probably go with the closing down route. Seems a bit strong money?
In regards to the company, you have now two options:
1. You can keep company dormant – that would give you the option to start trading again at any time. The fees would go down to £48 per month (including VAT) from new company year.
2. You can close the company and we can help you with that. If you go with this option, you will stop paying the SJD fees from the following months after closure date (I think it is now too late to avoid the November 2016 fees but definitely from December 2016 you would not have to pay for SJD fees). There is a closure cost of £360 for the companies with reserves below £25,000.
With closure, we prepare the closure accounts, closing VAT/ PAYE scheme and also would prepare 2016-17 tax return for you later on. I will be issuing you as well P45.
Had the following back from the accountant, sound reasonable? I'd probably go with the closing down route. Seems a bit strong money?
In regards to the company, you have now two options:
1. You can keep company dormant – that would give you the option to start trading again at any time. The fees would go down to £48 per month (including VAT) from new company year.
2. You can close the company and we can help you with that. If you go with this option, you will stop paying the SJD fees from the following months after closure date (I think it is now too late to avoid the November 2016 fees but definitely from December 2016 you would not have to pay for SJD fees). There is a closure cost of £360 for the companies with reserves below £25,000.
With closure, we prepare the closure accounts, closing VAT/ PAYE scheme and also would prepare 2016-17 tax return for you later on. I will be issuing you as well P45.
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