Going permanent but keeping office space

[StarBuck]

I am a contractor paying myself through a combination of PAYE and dividends. Next month I start =gulp= permanent employment elsewhere. I plan to keep the company going because there will be residual income from website hosting and monthly support contracts – as well as some freelance work. But I don’t foresee this being huge amounts – perhaps £1k/month.

I currently rent a small serviced office (£200/mth) from which I run the business. The permanent job is working from “home” so I plan to keep the office and work from there.

My initial idea is to scrap MyCo’s PAYE scheme and keep the company running so it can pay for the office facilities, taking the occasional dividend where possible. Is there a certain level of company income HMRC would expect to see in order to “justify” paying for the office? Or would it be seen as a tax “trick”?

The alternative is to scrap the company completely and transfer the office contract into my personal name.

Does anyone have any experience with this?

[malvolio]

If the company has an income stream, a viable business and a shareholder, why the hell would HMRC be worried?

Presumably you're a director of YourCo. As such you can elect not to pay a salary. Where's the problem?

[PhilAtBFCA]

There seems to be no reason why you would want to pay a salary from this company, you certainly do not need to as the Director.

As the shareholder you may receive income from dividends, if there is profit !

If you make a loss this year you may be able to set that loss against a previous years profits and reclaim some CT. ( Advice needs to be taken on this though ).

It would seem tax effective for you since you already have the company, and probably better than being self employed ( no NI on divs).

Phil