Running a contract and a perm job at the same time

**Taxless** · 30 June 2011, 14:10

“I presume I can continue to accrue funds into my Ltd from Company A whilst taking the paycheck from Company B without any tax implications? I presume my Ltd doesn't HAVE to pay me.”

The tax implication is that without a salary deduction, Company A would pay more Corporation Tax, but this is probably countered by the personal tax you would pay at Company B. To get your PAYE code sorted out at Company B you will probably need to complete a P46 for them.

If you have taken salary from Company A since 6 April then presumably no PAYE (small salary). As it stands, you would then pay tax on all of your salary from Company B.

You could ring HMRC, once you have details of Company B’s PAYE reference, and ask them to allocate some of your personal allowance to Company B salary to minimise the tax paid there and aid cashflow.

However, this complicates Company A as you will then have tax to pay under PAYE in a future month, even if you do not pay yourself anything else, as there are less allowances available and the PAYE code has presumably been operated on a cumulative basis.

In subsequent months you would get a little bit of tax back until it sorts itself out at the end of the tax year.

Your company does not have to pay you anything, unless you have a formal contract of employment, which for a one man company would be very unusual.

Would it be feasible for Company B to contract direct with your Company A and then your company could just continue to pay you as it has done to date?

“ ......... is it best for tax reasons to wind up the Ltd and take out the funds in it using entrepreneurs taper relief?”

This is a personal choice based on the numbers and likelihood of the Company B gig becoming permanent. It is still possible to wind up with an effective 10% tax rate, or possibly no tax if the sum is less than £10,600, but this won’t be around forever.

“If I do do this, and at some point in the future decide to spin up the my Ltd again, can I reform it using the same name, or once it's gone is it gone forever?”

Depending on the timing it may be possible to resurrect the company name but in time, others will also have the chance to use that name, so it may be lost forever.

You have to balance ongoing cost/hassle of preparing accounts and submitting annual returns, even if dormant, against your desire to retain the company name.

**slogger** · 1 July 2011, 07:10

Originally posted by Taxless View Post

“I presume I can continue to accrue funds into my Ltd from Company A whilst taking the paycheck from Company B without any tax implications? I presume my Ltd doesn't HAVE to pay me.”

The tax implication is that without a salary deduction, Company A would pay more Corporation Tax, but this is probably countered by the personal tax you would pay at Company B. To get your PAYE code sorted out at Company B you will probably need to complete a P46 for them.

If you have taken salary from Company A since 6 April then presumably no PAYE (small salary). As it stands, you would then pay tax on all of your salary from Company B.

You could ring HMRC, once you have details of Company B’s PAYE reference, and ask them to allocate some of your personal allowance to Company B salary to minimise the tax paid there and aid cashflow.

However, this complicates Company A as you will then have tax to pay under PAYE in a future month, even if you do not pay yourself anything else, as there are less allowances available and the PAYE code has presumably been operated on a cumulative basis.

In subsequent months you would get a little bit of tax back until it sorts itself out at the end of the tax year.

Your company does not have to pay you anything, unless you have a formal contract of employment, which for a one man company would be very unusual.

Would it be feasible for Company B to contract direct with your Company A and then your company could just continue to pay you as it has done to date?

“ ......... is it best for tax reasons to wind up the Ltd and take out the funds in it using entrepreneurs taper relief?”

This is a personal choice based on the numbers and likelihood of the Company B gig becoming permanent. It is still possible to wind up with an effective 10% tax rate, or possibly no tax if the sum is less than £10,600, but this won’t be around forever.

“If I do do this, and at some point in the future decide to spin up the my Ltd again, can I reform it using the same name, or once it's gone is it gone forever?”

Depending on the timing it may be possible to resurrect the company name but in time, others will also have the chance to use that name, so it may be lost forever.

You have to balance ongoing cost/hassle of preparing accounts and submitting annual returns, even if dormant, against your desire to retain the company name.

One thing to check is if permanent employee allows you to work for them and contract to another co - make sure nowt said in permy contract forbidding this ( unless you're not bothered being sacked that is ;-) )

Running a contract and a perm job at the same time