Hi all,
Looking for some advice. I currently work through my own limited company. Most of my work is what I'd call traditional contracting for x months on client's site. However, I do also do a few free lance projects when time allows working directly with clients and recently demand on this is increasing. This is what I really enjoy and what I'd like to do more of in the future giving greater flexibility and potentially, more money to be made.
I have an ex perm colleague who is in a very similar position to me and we've spoken about joining forces. We've worked on some projects together already. The way that I would see this working would be we create a new joint co. All invoices for any work we do get paid into that company and then we pay our individual ltd companies consultancy fees. This would allow us to have our own companies set up how we want as currently, for example my co is 60/40 split with my wife and I think his is a different split with his wife.
Another alternative if the above isn't the best way would be to split the joint co between myself, wife, partner and his wife in the example above, I'd own 30%, my wife 20% etc. Myself and potential partner would be employees of the joint co and no longer need our individual companies.
I will be seeking advice from my accountant on this but wondered if anybody was aware of any reason why this wouldn't make sense from an accounting/tax point of view. For example, we're both currently on the VAT flat rate scheme and I think the limit to join is £150K which as a joint co we'd probably exceed.
Thanks in advance
Looking for some advice. I currently work through my own limited company. Most of my work is what I'd call traditional contracting for x months on client's site. However, I do also do a few free lance projects when time allows working directly with clients and recently demand on this is increasing. This is what I really enjoy and what I'd like to do more of in the future giving greater flexibility and potentially, more money to be made.
I have an ex perm colleague who is in a very similar position to me and we've spoken about joining forces. We've worked on some projects together already. The way that I would see this working would be we create a new joint co. All invoices for any work we do get paid into that company and then we pay our individual ltd companies consultancy fees. This would allow us to have our own companies set up how we want as currently, for example my co is 60/40 split with my wife and I think his is a different split with his wife.
Another alternative if the above isn't the best way would be to split the joint co between myself, wife, partner and his wife in the example above, I'd own 30%, my wife 20% etc. Myself and potential partner would be employees of the joint co and no longer need our individual companies.
I will be seeking advice from my accountant on this but wondered if anybody was aware of any reason why this wouldn't make sense from an accounting/tax point of view. For example, we're both currently on the VAT flat rate scheme and I think the limit to join is £150K which as a joint co we'd probably exceed.
Thanks in advance
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