Side project using the money from my limited company

[LondonManc]

Hope that it helps. It's a rarity for an OP to come here with a particular view and actually listen to opinions to the contrary. Thumbs up for that! Good luck with the additional venture as well.

And accept them, more to the point

[TestMangler]

That's not a problem with SJD at all, totally incorrect.

SJD are spot on in this; if you ask the correct questions, you get correct answers. I asked them about funding a separate company and they said yes, so long as it is the same type of work. That is, I couldn't start a holiday home business or coffee shop with money directly from IT contracting.

Actually, yes you could, but don't let the facts get in the way.

[CompulsiveArsonist]

I'm sort of going through this at the moment. I have a meeting booked with my accountant so I can let you know what happened.

I have a contractingco. I want to start a retail business on the side. I am only putting the capital in, I won't be doing the day to day running.
My accountant has suggested that I set up the new business using personal funds, or to loan the money from contractingco to newco.

Newco needs to have a lease for the shop, buy stock and equipment etc. I wanted to save on Corporation Tax and use some of the earnings of the contractingco.

Suggestions are that contractingco can pay newco for some service (e.g. advertising) thus potentially reducing CT but otherwise there isn't a lot that can be saved. A better idea is that you get friends or family that are higher rate taxpayers to invest in your newco in return for shares under the EIS scheme. Your friends / family will get tax benefits.

[Platypus]

loan the money from contractingco to newco.

That would have been my first thought I must admit