Another company

[JRCT]

I'm thinking of starting a 2nd, and maybe a 3rd, company - or area of work - completely unrelated to my first (I have a LTD).

These are really at the hobby stage and I'm just wanting to dip my toe in the water and see if there's anything in it worth pursuing.

One of them will have costs based on sales initially, ie. I'm thinking of paying someone else to make stuff for me, as and when orders come in so no massive risk for me. If it looks like it's worth doing, then I'll want to buy kit that could cost £5-6k up front, so I can do it myself.

Should I start a new LTD for this, or am I better running them, for now as Myco LTD trading as Myhobby, or something similar?

[MojoDog]

I'm thinking of starting a 2nd, and maybe a 3rd, company - or area of work - completely unrelated to my first (I have a LTD).

These are really at the hobby stage and I'm just wanting to dip my toe in the water and see if there's anything in it worth pursuing.

One of them will have costs based on sales initially, ie. I'm thinking of paying someone else to make stuff for me, as and when orders come in so no massive risk for me. If it looks like it's worth doing, then I'll want to buy kit that could cost £5-6k up front, so I can do it myself.

Should I start a new LTD for this, or am I better running them, for now as Myco LTD trading as Myhobby, or something similar?

Are there any relevant searches you could have made on Google etc prior to posting this?
Someone's bound to ask...

[JRCT]

Are there any relevant searches you could have made on Google etc prior to posting this?
Someone's bound to ask...

Hi, Yes. And I have. As ever, there are pros and cons to this and I've also asked my accountant the same question.

I guess I should have worded it better to see if anyone else has experienced this themselves and chosen a particular route.

[TheFaQQer]

Would any potential customers be put off by you being VAT registered?

If your new company wasn't VAT registered, then you can potentially be up to 20% cheaper than any competitors who are registered. That's only going to make a difference if the customers can't claim the VAT back, though, eg. direct sales to the public.

[JRCT]

Would any potential customers be put off by you being VAT registered?

If your new company wasn't VAT registered, then you can potentially be up to 20% cheaper than any competitors who are registered. That's only going to make a difference if the customers can't claim the VAT back, though, eg. direct sales to the public.

Yes, that's a very good point. One of these would be selling direct to the public. The other, I suspect would be largely to wholesale or other companies, at least, although there could be a public element.

[speling bee]

Would any potential customers be put off by you being VAT registered?

If your new company wasn't VAT registered, then you can potentially be up to 20% cheaper than any competitors who are registered. That's only going to make a difference if the customers can't claim the VAT back, though, eg. direct sales to the public.

16.(6)% cheaper.

[VectraMan]

If you do it as one company, then the debts of one will be the debts of the other. I.e. you could end up bailing out your "fun" business with your contracting business if it all fails.

OTOH it's two companies, so two sets of accounts, returns, bank accounts, etc. etc.

I ran a second small micro Ltd. company for a while, but that was because it was shared 50/50 with a friend. But with no VAT, PAYE or much of anything, it was pretty easy to do (NLUK will popup any minute and tell you you're inviting extreme doom by not having an accountant do all the work).

Perhaps if it's at the hobby stage you should just do it personally as self-employed or however that works. Then if it gets a bit more serious and you're investing in kit, go Ltd.