Diversifying Ltd. to Non-IT as well as IT

[jonathanOnshore2010]

If you are running a bonafide sideline business then there's no problem as far as I can see, I don't understand why you would need to setup a separate company with all the admin hassle and expense (eg accountancy) that goes with it.

I agree. Just go for it. Remember, as long as it's legal there is huge scope to run a business, try new things and hopefully make money. All new startups take time and investment, so it's not unrealistic to have not much income in the first two years. Since you're in IT, get a template website and some business cards. Putting the finances through the company will keep track of things, and remember, businesses fail sometimes so there is no reason to fear HMRC if your genuine endeavour doesn't make a profit after giving it a good shot.

I don't see the point really of the hassle of a ltd co if the extent of running it is a small salary to the higher tax rate, and then divs drawn out. you might as well get a senior VP perm role at a bank and just do away with the hassle. Otherwise, use the flexibility of being in your own business and try some creative endeavors. Your accountant will figure out the details (if he's any good, note my previous experience with SJD) I wish you all the best in the photography.

Oh, and BTW. There was a comment about having to charge VAT on your photos once the company is VAT rego'd. I had that same dilemma with the therapy. But I figured since it was not the primary income source, I was happy to charge it to the clients but all I did was effectively absorb it into the hourly rate anyway and took a haircut (I dont bother the clients with VAT discussions as it's not important to them).

Also, seriously consider just a trading name for your other business. You can have "Ltd Co trading as XYZ Photography" for brand reasons.

[BlasterBates]

See separate reply, plus - its amusing that the immediate assumption is that I am trying to pass off personal gadget consumption as a business expense - there are obviously some right chancers in IT freelancing!
On a more serious note - surely having to set up a separate company is discrimination against the small guys - for instance, I suspect BP would laugh at HMRC if they tried to tell them to set up a separate co. because a new venture was not energy related.

It's not a matter of what we think, but HMRC will look at it. If you're running something like this at a loss, they'll take a dim view of you offsetting the losses against your income, ie. they would see this as your personal hobby and you should have no business getting them to finance you. That's the way they'll see it. Let us say you were to buy a yacht for half a million, and then charge 10,000 for rides, do you honestly think HMRC would let you simply pay no tax ie. take off the depreciation? Don't you think everyone would do this, if they could?

If you want to run this as a business create a separate Ltd, then if it makes a profit in the future, you can offset losses in previous years.

Anyway check with your accountant and he'll tell you the exact same thing.