Company TAX and NI Help Needed!

[newbie123]

I recently setup a company back in February this year and provided IT consultancy for 1 client which came to an end a month ago. I have since been offered a permanent position with another firm and would like to know what the best thing to do is? wind the company down or make it dormant.

I would also like to know what I need to do TAX and NI wise as I have now been paid for the work.

Thanks
Newbie

[pmeswani]

I recently setup a company back in February this year and provided IT consultancy for 1 client which came to an end a month ago. I have since been offered a permanent position with another firm and would like to know what the best thing to do is? wind the company down or make it dormant.

I would also like to know what I need to do TAX and NI wise as I have now been paid for the work.

Thanks
Newbie

This is one of those "Speak to an Accountant" scenarios. We can tell you where to register for Tax and NI, but we can't tell you how much to pay or if you need to pay NI or Income Tax. You need to speak to an Accountant about how best to minimise the amount you need to pay the tax man. Also, we have no idea if your contract is IR35 compliant, so we can't advise you which taxes you need to pay. So, going back to my first sentence.... Speak to an Accountant.

[Wanderer]

wind the company down or make it dormant.

I would also like to know what I need to do TAX and NI wise as I have now been paid for the work.

There are a bunch of options, but as pmeswani says, you need an accountant to advise on your circumstances and sort this out for you.

If you are inside IR35, you have to pay a lot of tax and NI.

If you are outside IR35 then you can take the money as dividend and avoid paying a lot of tax. There are calculators on the web, do a search for IR35 calculator to get a rough idea of how much tax you are liable for.

You may be able to do an ESC16 and take the money that way (ask the accountant about this).

If you want to keep your company and perhaps use it again in the future then you can make it dormant but that can cause grief because you still have to do a certain amount of admin. You are probably better to get rid of it, you can start a few one for a 100 quid if you ever need one again.

Good luck!

[SallyPlanIT]

I recently setup a company back in February this year and provided IT consultancy for 1 client which came to an end a month ago. I have since been offered a permanent position with another firm and would like to know what the best thing to do is? wind the company down or make it dormant.

I would also like to know what I need to do TAX and NI wise as I have now been paid for the work.

Thanks
Newbie

Presumably you have not paid any PAYE yet? If you are not registered with HMRC then you will need to do so. Be aware of payment dates. If you were to put salary through your company for the 2009/10 tax year, then unless you have filed the P35 and paid the PAYE, this would be overdue and attracts a penalty of £100 per month plus interest.

In my opinion I would seek to close the company unless it may be used in the next year or so. As Wanderer suggested, it may be possible to withdraw the money as capital rather than income thus being able to attain a 10% effective tax rate.

However, seek professional advice as your circumstances are unclear from what you have detailed.