Setting up a ltd company whilst already employed.

Over Clocker

Over Clocker

Over Clocker

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Hi guys,

Just wanteds to sound you for anything major I should be aware of, tax wise etc.

I'm currently in full time employment. Myself and a collegue are considering setting a ltd company partnership offering certain IT services and discounted parts/systems to some of our current clients, plus some other organisations. It will be to supplement our income and will of course all be carried out outside of regular work hours.

First of all, can i assume it is ok to be owner of a company whilst you are already in full time employment?

Also, what is the income tax position on this?

We have a consultant friend drawing up the details to advise us, but they are away for a while.

Thanks guys,

Mal
 
need to be careful that your current employers are ok with this. i know in my contract there is a specific clause that i can not work outside of the company etc etc
 
Yes it's ok and legal.

You'll need to fill out a tax return by default as a company director. That's where you declare any extraordinary earnings ie. dividends.

Your directors salary (if applicable) will be handled through PAYE just like your normal wage.

Edit: Too slow. As above, make sure it's not in violation of your contract with your current employer.

Good luck :).

Edit 2: There's no tax allowance on your earnings from your second 'job' so you'll pay tax on every penny that you make.
 
As mentioned - It's entirely dependent on your current employment contract.

I, for example, am not supposed to hold any directoships, although I have negotiated to keep them.

Again, your current employer may not be happy that you are tapping up their clients, but that depends entirely on your contract.

One other alternative is to set up the Ltd company, and have your current employer employ them instead of you (albeit with you performing the same role and function, just with less of a tax burden). That, too, depends on your current employer's cooperation.
 
Watch out as many companies have non-poaching clauses and if you use you influence in one job to recruit clients into your company, your employer could drag you into court.

Of course this all depends on how well worded your contract is.
 
Other schools, i am network manager at a school and over the last 2 years i've built up an "internal business" supplying it support to other local schools.
 
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