Ltd company Investment query

[ASB]

I wasnt saying you should do it. Merely that in some circumstances it could be beneficial.

company acan fund b in may ways. Loans, equity etc.

[contractoruser]

....
IR35 presumably messes this up (please correct me if I'm wrong). You'll have to pay PAYE tax on 95% of the contract income even if you spend 50% of it on your other venture. Tax on money you've never earned.

Do you mean If I am caught inside IR35?

There can be a case to be made for two separate companies. You could be a shareholder in both or your company could.

It may be relevant from a vat point view, it may help with FRS classification should you use that, it may help with ring fencing potential liability issues.

Equally it may complicate them.

But it is a subject worthy of discussion with your account.

You may also want to consider ipr ownership and the jurisdiction of the entity that owns the ipr and its respective owners.

How will then the earner company (Lets say A) invest in company who is going to do this project (Lets say company B)?

How will then tax be calculated on company A income? Not sure how will it work...

[VectraMan]

Two companies would make the admin worse, and you can always separate them later - i.e. start a new company for just contracting.

IR35 presumably messes this up (please correct me if I'm wrong). You'll have to pay PAYE tax on 95% of the contract income even if you spend 50% of it on your other venture. Tax on money you've never earned.

[ASB]

There can be a case to be made for two separate companies. You could be a shareholder in both or your company could.

It may be relevant from a vat point view, it may help with FRS classification should you use that, it may help with ring fencing potential liability issues.

Equally it may complicate them.

But it is a subject worthy of discussion with your account.

You may also want to consider ipr ownership and the jurisdiction of the entity that owns the ipr and its respective owners.

[northernladuk]

You've got an accountant yes?

[Darren at Fox-Bartfield]

Website

Hi All,

I would like to discuss a small plan with you guys just to get some ideas about if it is feasible or not?

I am planning to open a company which I will be using to do some IT contracting work 4 days a week. I will be 100% shareholder of that.

I am also planning to make a website lets say something like facebook but with limited scope. Can my company invest into this website by paying lets say fees for hosting, hiring some contractor for design/development work and/or maintenance. I am planning to hire someone in India or using the freelancer websites to get this website done. Are these expenses/investment allowed from HMRC point of view?

Of-course any earnings from this website will also go to my company but it might take some time to get a first paid customer.

Any thoughts?

Yes, the company can invest in development work that will lead to new revenue streams.

[Hobosapien]

Of course your company can do other stuff. You're only an employee of that company so look at it more like your company will be doing those things long term and will send you on short term contracts to bring in moolah for it to spend on those other things. You just happen to also be the one in control of the company.

An accountant will be able to help you stay on right side of the law as far as not spending money on things you shouldn't (e.g. things you can't claim as an expense for tax purposes) or that your company doesn't actually have a right to spend (VAT, set aside for corp tax if fortunate enough to be in profit at year end).

[Fred Bloggs]

Yes you can.

[contractoruser]

Hi All,

I would like to discuss a small plan with you guys just to get some ideas about if it is feasible or not?

I am planning to open a company which I will be using to do some IT contracting work 4 days a week. I will be 100% shareholder of that.

I am also planning to make a website lets say something like facebook but with limited scope. Can my company invest into this website by paying lets say fees for hosting, hiring some contractor for design/development work and/or maintenance. I am planning to hire someone in India or using the freelancer websites to get this website done. Are these expenses/investment allowed from HMRC point of view?

Of-course any earnings from this website will also go to my company but it might take some time to get a first paid customer.

Any thoughts?