help needed, self employed / company tax stuff

help needed, self employed / company tax stuff

Author
Discussion

koolchris99

Original Poster:

11,375 posts

181 months

Saturday 10th July 2010
quotequote all
Right, here is my situation. please go easy im clueless about tax.

I have got my self a 1 year retainer from company X, to be paid quarterly to my company Y (that i haven't "made" yet). about 27k

I will also be looking for a 9-5 job, fingers crossed around the 20k mark, which i will be an employee of someone else.

so questions:

1. how do i start a company + company bank account?
2. Tax wise how does it work? do i pay myself?
3. I have heard about dividends? does this lower my tax?

Basically whats the best thing for me to do, a) pre 20k job and b) post 20k job?

Cheers

Chris

Eric Mc

122,336 posts

267 months

Sunday 11th July 2010
quotequote all
Do you plan therefore to run a limited company for one activity and be a normal employee for another?

PS - the one thing you definitely will not be (based on what you are desribing) is "Self Employed".

koolchris99

Original Poster:

11,375 posts

181 months

Sunday 11th July 2010
quotequote all
Hi,

Yes i will be the director of the limited company, and i will be a normal employee of the other.

cheers

Eric Mc

122,336 posts

267 months

Monday 12th July 2010
quotequote all
Fine. There are no tax or legal problems with having a "normal" job and running a separate limited company - providing any employment contracts you might have do not prohibit or restrict such activities.

Would you not consider using the limited company as a conduit for receiving the income from your anticipated "normal" job? Would the activities you envisage carrying out in the two activities be of a broadly similar nature?

If you operate a limited company which only has one customer at any one time, you could run the risk of being exposed to the dreaded provisions of IR35. If a business can show multiple customers it stands a better chance of showing that it is indeed a genuine trading entity and not just a limited company set up avoid or mitigate PAYE and NIC provisions.

koolchris99

Original Poster:

11,375 posts

181 months

Monday 12th July 2010
quotequote all
Eric Mc said:
Fine. There are no tax or legal problems with having a "normal" job and running a separate limited company - providing any employment contracts you might have do not prohibit or restrict such activities.

Would you not consider using the limited company as a conduit for receiving the income from your anticipated "normal" job? Would the activities you envisage carrying out in the two activities be of a broadly similar nature?

If you operate a limited company which only has one customer at any one time, you could run the risk of being exposed to the dreaded provisions of IR35. If a business can show multiple customers it stands a better chance of showing that it is indeed a genuine trading entity and not just a limited company set up avoid or mitigate PAYE and NIC provisions.
Hi, That could be possible, both jobs would be in the design industry..

Where do i start? or is it best to get an accountant to set it all up?

Eric Mc

122,336 posts

267 months

Monday 12th July 2010
quotequote all
There have been dozens of threads on starting up limited companies on PH - some quite recent.

Setting up a limited company is easier and cheaper now than it ever has been. Most people wishing to set up a company do so over the internet. Do a Google search under "Company Formations" and you will be spoiled for choice.

Word of warning - make sure you search under "UK" as you don't want to set up an Australian or Irish company by mistake smile