Do I need a limited company

DJ85

DJ85

DJ85

Associate
Joined
14 Dec 2017
Posts
2,040
Location
Aberdeenshire
Looking for some advice, I'll write down as much of the back story as possible.

I work offshore 3/3 but it doesn't aways work like that and I'm usually home more than I'm away. I'm a time served joiner and In all my time off recently I have found myself going round and helping a few of my pals doing jobs in there houses. Not paid but the odd bit here and there or beers is sufficient. But I've started enjoying it and found myself doing doing a few homers here and there. I put myself up on mybuilders.co.uk and have had a few job offers as well. As I'm not home half of the year I won't be doing it much but there could be a potential to make maybe 300/700 extra per month doing these jobs. Do I need to set up a limited company? I have looked into it and it can be set up easy enough but then I read about picking a director,accountant,shareholders,separate bank accounts etc and to be honest its a bit over my head. Do I have to pay X amount for an accountant every month when I might not even make that amount on jobs per month? And if I did do I add 19% vat on top of my prices and keep the 19% back in an account for a tax bill? The the rest would be mine or is it wise to keep in in the account as well? Then there'd the question of public liability insurance.

Basically this is just a side thing (hobby) making money in my spare time
Any advice is much appreciated.
 
Thanks for the replys. i have been watching youtube videos and although theyve been a little helpful. learned more reading these 3 comments. I apologise in advance for my uneducted questions: I just want to do the right thing and be organised as if i carry on doing "homers" for people and then end up getting a huge tax bill at the end of the year i wouldnt be best pleased.

@MikeTimbers so basically if i pay myself 500 per month and leave the rest in the account till the end of the yerar it can either stay there as profit and taken out as dividends at the end of the year? and that will save me paying income tax? and then add 19% to my quotes and keep that back for an HMRC bill end of the year?

@Quartz This will be completely seperate as i am employed from my employer PAYE. no problems with my being director, wife being secetary as she basically is doing that anyways whilst im away as no phone signal ofsshore!

@rid Yes all your assumptions are correct this will be on my time off doing jobs, i just thought being limited would be a safer option as itll be more organinsed, i would set back 20% of every job for the end of year self assessment, pay myself up to 730 per month as above and leave the rest and going by your link i do not expect to make £12,500 per year income tax wise anyways. I must already be in a high tax bracket in my fulltime job as i earn between 70-75k. would that put the "business" tax bill up
And expenses as you mentioned you deduct these at your self assessment is this fuel, phone bills, tools etc? i already have a car which i throw my tools in the back, already have a mobile phone contract that ill be using and id be using my personal car to go back and fore to jobs etc. Also got pretty much all the tools ill need. are these deductable? and do you need to keep all receipts till end of year and claim back? And is that only if VAT registered.

Last question, paying myself so for ease say i make 1000 per month inc vat do i put the £200 (20%) in the bank set aside, Take £500 for myself, and leave the £300 in the account to build up over the year? then at the end of the year i should get a 2400 tax bill, which will be there waiting, £3600 in the account which can be left or taken out in dividends and would have been paying myself £500 per month.

or would there be no Tax bill as less then £12,560.

As i said above just uneducated at this point and dont want to get cought out on anything.
 
Last edited:
I'm slowly getting my head around it, just trying not to jump I head first and balls it up. I'm just working as a full time employee through PAYE so I'm ok that way and earnings in the high tax bracket already so I don't think the 500/700 per month would be enough to put the tax bracket up to the next level. I'll maybe stay un vat registered as not sure I want to go down the route of claiming vat back on purchases and I won't really have any! And then just keep 20% back from my earnings. I was looking at accounts and was thinking about using tide, they set up your company for you and also a tide business account, I did see starling came up as best business account perk/fees wise though. And yes name wise that's right the name I'm set on seems to have been taken but on the company house website it looks to be absolved in the next 2 months it says, so might have to tweak the name a bit or wait till its free.

@dr_volki I don't see myself making £12560 in a year to be honest but would be far off ill just make sure I get 20% of whatever I do back. I'm not sure on the tax free dividend amount but I did read dividend tax was at 15%
 
Would it make more sense for my wife to start the limited company then as she doesn't work/ earns zero per year and claims no benefits of any kind? and then she can pay herself and i wouldn't take a wage?

b0rn2sk8 said:
You need to get some professional advice and they’ll need to run some projections on what is the best route to go. They’ll really not be much in it and corporation tax is due to increase.

Limited companies have other advantages, mainly being limited liability. So if you mess up, your customer would be litigating the company and not you personally.
Click to expand...

I think so to, who would i be looking at speaking to?
 
Thanks

No harm in having a look ill go do that just now, was it "your company formations"?

Is making it in my wife's name as I mentioned above an idea as it would be fresh/less complications or would it have to be in my name?
 
Yes thats true, its more just advice from people that actually have limited companies and from there point of view I was looking for as I do not know anyone that has one or runs one to ask. Way to start looking properly now!

Yes thats true, its more just advice from people that actually have limited companies and from there point of view I was looking for as I do not know anyone that has one or runs one to ask. Way to start looking properly now!
 
Last edited by a moderator:
Quartz said:
Rather, you will be able to pay her from the company. But you really need to speak to a professional.
Click to expand...
I done what was said above and went to a formation website and there is an option to get a free meeting with an accountant to go through everything and see what would work out best for me.
@ahar thanks, I think I would be able to do most of the accountant stuff myself I get enough time off when I'm offshore and quite OCD when it comes to paperwork. Keep everything. But I will have a speak with one first and see what they think is best to do.

Got the consultation coming up next week and I've got all my questions written down to ask and then I'll see how much they'll have to do for me and if I'd manage to do it myself since the directors salary will be so low it'll miss out on income tax/NI, should cut down a lot of paperwork I hope. Just 2 more questions to ask.

Also been told the corporation tax must be paid by an accountant each year is that true?

As for bank accounts I was looking at starling or mettle. Then do you just get a Xerox or quick books type sub and integrate it?
Is it worth getting the payroll add on also? What do you guys use?

Thanks
 
Last edited by a moderator:
I'm earning a main income but my wife isn't. She is struggling to find a Job and as I was wanting to give this a try in my spare time, She is willing to have the company in her name and do all the admin day to day stuff and take a small pay. We was thinking take a pay small enough to not pay income tax, NI but high enough to gain pension benefits, pay the corporation tax at the end of the year and leave the rest in the business.
Thanks Quartz I can add that to my many questions.
 
Sorry I meant to give an update, good news though I spoke to a few accountancy firms online about it all and then picked one, they said there won't be much to my account but it does get quite confusing with the initial setup and with deadline for things with through out the year ect and payroll even if just directors. But I picked one that I wasn't in a full years contract with and said it use the for the initial 3 months then see how it goes from there.
Been keeping receipts for everything that I have used,bought, set up a starling business account and once im back from offshore on Monday I have my first job on the Wednesday so I Just need to call the accountant and get setup.
I was on Google for hours trying to get my wife setup up for paye but then had no UTR so had to register for self assessment. So hopefully the UTR is through be Thursday next week and I'll hand it over the the accountant to do. a lot easier.
The accountant said a lot of there clients work it the way we are so I'm happier now
 
You must log in or register to reply here.
Back
Top Bottom