Contracting and side business

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Sally BFCA replied

7 April 2010, 16:17
It's worth playing with the numbers with regards to VAT and mixing the two businesses

The threshold for registration if £68,000 currently and the ceiling turnover for the VAT FRS scheme is £150,000

1) Who will the buyers for the e-shop? If it's the general public they cannot reclaim the VAT (by and large) - what are the goods? are they standard or zero rated?

2) Many contractors profit from being registered on the VAT FRS.

3) If there are significant purchases of stock that have input VAT, then the VAT FRS would not be of benefit.
Leave a comment:
MarillionFan replied

7 April 2010, 14:14
I run a physical shop as well as an E-shop. I also contract.

I used to do all three through a Ltd company, but the additional paperwork/receipts etc of the shop/ecommerce business were a pain in the ass.

So I split into the following

1) Contracting LTD
2) Shop/E-Business as Self Employed

In addition, dependent on your E-business and VAT thresholds. Keeping below the VAT threshold on (2) is more beneficial in terms of profit.
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The Wikir Man replied

7 April 2010, 14:13
Originally posted by az4 View Post

can we run the e-shop through the same Ltd company or would it be better to set up a different Ltd for the shop?

Yes, you can. If you can get a decent, cheap deal on company formation and accountancy then it may be better to be separate.

If the funds are low, then why not just have her run it as a sole trader?

Originally posted by az4 View Post

I mean would the e-shop effect tax/IR35 for the company?

If the shop is making a loss, then you can offset that against your contracting profits.

No impact on IR35, since that's assessed on a contract by contract basis.
Leave a comment:
Clare@InTouch replied

7 April 2010, 13:31
Yes you can put both through the one limited company.

No it would not have any bearing on IR35.

:-)
Leave a comment:
az4 started a topic Contracting and side business

7 April 2010, 09:41
Contracting and side business

Hello.

I'm quite new to contracting and I'm planing to use my own Ltd company.

I'm currently setting up an e-shop to keep my spouse busy.

My question is:
can we run the e-shop through the same Ltd company
or would it be better to set up a different Ltd for the shop?

I mean would the e-shop effect tax/IR35 for the company?

Thanks.

AZ
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