Limited Company for additional work

[fidot]

Have you made sure that the employment contract with your new employer allows this? I had to negotiate that into my employment contract when I recently took a perm job.

[gables]

This would coincide with my thoughts (though may make sense to stay VAT registered if your clients will typically be VAT registered themselves).

Can I ask why? All he'll be doing is collecting tax for the VAT man, an overhead not needed at this level of turnover surely?

[Maslins]

Can I ask why? All he'll be doing is collecting tax for the VAT man, an overhead not needed at this level of turnover surely?

He can reclaim VAT if he is VAT registered, he can't if he's not. Ok so if VATable costs are literally zero then that's no financial benefit (disregarding FRS for this purpose, as from April 17 looks like there's negligible profit to be made on that)...but I'd anticipate even with no accountancy fees there'll probably be some VATable computer/phone costs. If the clients are VAT registered, they won't care whether VAT's added to the invoices they get or not.

[VectraMan]

Further to what other people are saying about pensions, instead of making pension contributions from YourCo, then you could use the extra money you are earning in YourCo to ask your permie job to make/increase pension contributions (Which would be made net of employer and employee NICs) - you can then just top up your personal income at lower dividend tax rates. Just a quick and perfectly legit shuffling round for tax purposes.

I think that gets today's cleverness award. I'd have never thought of that.

[OldTimes]

Thanks all for your help - some good advice in here! I'm glad its not a bad idea and I think the option of deregistering for PAYE and VAT(maybe) will make it a bit easier to manage.

Think I'll go down that route to see how it works out.

Thanks again