starting a sub-branch

[Friday Blue]

Thanks for the input from everyone.

Sorry, i totally forgot there is an association rule in place.

I was thinking may be my surplus is good enough to start my own property BTL company. but because it will count as CIC i.e. attract alot higher tax. i don't want my main engineering income to be polluted. i wonder how that would work, since company A is small business and is subject to 20% CT and the other one is 28%.

[dynamicsaxcontractor]

Well, it isn't.

e.g. Association Rules - UK Business Forums

That's very good to know, thanks for that piece of information.

[Platypus]

I thought it would still be 300K limit split between the 2.

Well, it isn't.

e.g. Association Rules - UK Business Forums

[dynamicsaxcontractor]

Whi

Using two (or more) companies will reduce the limit of when the small company rate of corporation tax applies. Not sure what your profits are but a small company can make upto £300K profits and pay 20% corporation tax, if you have two companies this is split, to £150K each.

Alan

Are you saying than even if the second company only made a very little profit you still reduce the limit to 150K in the first? I thought it would still be 300K limit split between the 2.

[Nixon Williams]

Hi all,

Just wondering is it possible/difficult to create another company using my current limited company to finance the initial cost. (i.e. company A put some money into company B and hold all the shares in company B). Main reason is that, my current company being an engineering company doesn't quite fit some of the business activities/ideas i have in mind i.e. selling things on ebay or websites etc. so may be i can channel some of the retained profit from this year and "invest" into another company?

anything i should look out for? (just intital ideas at the moment, will give it more thought once I get some pointers)

Cheers + thanks in advance

Whilst it is possible, I would not neccessarily advise that you do this.

Assuming that your company has been set up with the normal rules etc, then your company can undertake any activity the directors deem fit.

An extra company will create more cost and hassle unless you have some other reason for doing this.

Using two (or more) companies will reduce the limit of when the small company rate of corporation tax applies. Not sure what your profits are but a small company can make upto £300K profits and pay 20% corporation tax, if you have two companies this is split, to £150K each.

There are rumours that the Chancellor will announce the aim of just one rate (probably 20%) for all companies in the future but this will probably be a few years away.

Alan

[JamJarST]

Pretty sure this has been asked before, have you tried a search?

[Friday Blue]

Hi all,

Just wondering is it possible/difficult to create another company using my current limited company to finance the initial cost. (i.e. company A put some money into company B and hold all the shares in company B). Main reason is that, my current company being an engineering company doesn't quite fit some of the business activities/ideas i have in mind i.e. selling things on ebay or websites etc. so may be i can channel some of the retained profit from this year and "invest" into another company?

anything i should look out for? (just intital ideas at the moment, will give it more thought once I get some pointers)

Cheers + thanks in advance