Trading as Ltd co when actually self employed

[gbrown100]

For the last year or so I have been sending out invoices for my work under a limited company name that my friend has. I am PAYE full time and self employed (PAYE with yet another company, not my friends ltd co). Basically I use the name of the ltd co trading name in nice big pretty letters across the top but then further down I have "<my self employed name trading as limited company name> and all payment is made to me personally. I was led to believe that this was perfectly OK at the time.

Can I ask, is this an "OK" thing to do or is there a problem if I am ever audited by the tax man?

Thanks for any advice!

[Gratis Guidance]

That is sailing so close to the wind that you need to speak to a qualified lawyer to get the right answer.

As far as I know, its too dodgy to touch- certainly not recommended and could be construed to be deliberate fraud

sorry if its not what you wanted to hear !

[maidofkent]

No, that doesn't sound right at all.

Out of curiousity, why do you do it?

MoK

[maidofkent]

No, that doesn't sound right at all.

Out of curiosity, why do you do it?

MoK

[gbrown100]

sorry if its not what you wanted to hear !
It's most definately not what I wanted to hear! My intention was never to be part of or take place in any fraudulent activity.

Out of curiosity, why do you do it?

The idea was that we are several individuals who wish to work together whilst still being self employed. Basically we wanted to show that we were working together harnessing multiple skills in different areas. To that end presenting a standardised website, documentation structure etc helps us to achieve this but have always been up front about how we work and ultimately we will likely all become part of the said Ltd company once business has taken off. I have been careful to ensure I present accurate tax returns as it is good to have confidence that ones affairs are properly in order.

Now I am a little worried so I think a trip to an accountant is a good idea! Does anyone have any idea how much this is likely to cost? I guess if I turn up and present my books, invoices etc they should be able to sort me out pretty quickly.

[maidofkent]

Are you saying, then, that all the group of friends do the same as yourself, in respect of your invoicing?

It's impossible for me to guess at how much an accountant would cost, but you can shop around and get a quote, and I would recommend that you do.

MoK

[elainec100@cheapaccounting]

If the invoice has the limited co name on it then it would be fair to assume that that is the business you are dealing with, should account for the income and pay the necessary taxes.

To do anything other than this just opens yourself up to a whole heap of questions IMO.

You may have done it in all innocence but having the name in 'nice big letters' as you put it misleads.

So for a variety of reasons I would say that this is not OK.

[taxattack]

For the last year or so I have been sending out invoices for my work under a limited company name that my friend has. I am PAYE full time and self employed (PAYE with yet another company, not my friends ltd co). Basically I use the name of the ltd co trading name in nice big pretty letters across the top but then further down I have "<my self employed name trading as limited company name> and all payment is made to me personally. I was led to believe that this was perfectly OK at the time.

Can I ask, is this an "OK" thing to do or is there a problem if I am ever audited by the tax man?

Thanks for any advice!

Who actually contracted with your clients - was it the ltd co, or yourself? Ie, when you agreed to do the jobs, did you do so in your own name or the ltd company's? The answer to this determines who formed the contract. If it was the company, then you now owe the monies to the company.

If it was yourself, you might want to issue credit notes from the company, and new invoices from yourself, explaining to clients that there has been an administrative error.

Chris

[yorkshirejames]

What you should do is put the company name (or website address) but without the Ltd at the top of your invoice - then lower down say that "ABC Trading is a trading name of John Smith of 123 Town Street, Ratesville"

Do NOT put ABC Trading Ltd anywhere on these documents.

[gbrown100]

What you should do is put the company name (or website address) but without the Ltd at the top of your invoice - then lower down say that "ABC Trading is a trading name of John Smith of 123 Town Street, Ratesville"

Do NOT put ABC Trading Ltd anywhere on these documents.

That is exactly what I have done - there is no limited company information on the the invoice at all. It just says the company name and of course then has the "My name trading as company name (without ltd) and my address details".

As I said I have been very up front about it and no-one has minded. That of course doesn't necessarily make it right even with good intentions and to that end I have already contacted an accountant with a view to making an urgent appointment!

I guess we live and learn! I am just glad I popped the question on here now and didn't wait for something to go wrong!

PS - The Ltd company is dormant currently.

[yorkshirejames]

As long as the word Ltd isn't on there then you'll be fine. Its like those accountants' firms who are franchisees of Tax Assist and suchlike.

[Jenni384]

As I understand your post, you aren't trading as a Ltd. You just happen to be trading with the same name as a dorman co with which you might one day be formally affiliated.

As long as you, Joe Bloggs, are Joe Bloggs trading as Blue Banana, that's fine.

The fact that there is a Blue Banana Ltd doesn't matter. Unless you start saying you're Joe Bloggs t/a Blue Banana Ltd. That would be wrong.

If other sole traders also want to trade as Blue Banana, that's up to you and them and as long as your customers know exactly with whom they are dealing, and as long as you file your taxes properly, you should be fine.