Running a business whilst still employed?

[DenisCooper]

Hi all,

I have recently found out that i may be being made redundant in my current job as ICT consultant for the NHS. It's a good thing in a way as i have being wanted to setup my own business for some time.

I'm after a bit of advice on tax issues. I want to get the company setup so i am in a position to make an immediate move after redundancy. Currently there are no timescales on when redundancy may happen, it could be in the next 6 months, but could also be longer (who knows with the NHS).

So my question relates to, do i need to pay any fees (apart from setup fees) to run a company if there is no income from it at all?

Also, if there is income from it, and i am still employed by the NHS then what tax issues am i going to face?

Many thanks in advance.
Denis

[Eagle]

Hi Denis.

Do you need to set up as a company? Why not just start as a sole trader?

If you still have full-time employment, your employer will sort out your tax affairs on their side; all you need to do is register with HMRC and declare your income (with a tax return) - they'll then take their cut twice yearly.

Consult an accountant for best advice re Lts vs Sole Trader - it very much depends on your business.

Hope this helps,

Mark

[DenisCooper]

Hi Mark,

Thanks for the reply.

I do need to setup as a company yes, mainly because i will be providing IT services to other companies, including government based agencies (NHS, Councils, Police etc - that is if i win on the tenders anyway)

Really i need to understand if i will have to pay anything if i have no money coming into the business.

Thanks
Denis

[simonr]

Not sure what fees you're thinking of here... obviously if you're not making any profit you won't be paying any taxes. Telling HMRC that you're now (also) self employed doesn't cost anything.

S

[Williams lester]

Telling HMRC that you're now (also) self employed doesn't cost anything.



If you are a company director then you are not self employed.

[simonr]

.... although I'm sure you appreciate what I mean. :)

I know HMRC doesn't count me as self-employed (I own my company etc) but I still feeeelllll like I'm self employed most days! :)

S

[DenisCooper]

lol...okay - well thats good - so basically i only have to pay HMRC if i make any money from the company - and thats all the taxes - i'll get an accountant work all that out for me...

thanks

[nitro23456]

If you want to register the company with you as a director, you can.

You can register it as dormant with HMRC if you dont plan to do anything with it for the time being.

All you would have to do is file dormant accounts with HMRC and companies house and your annual return with companies house whilst still dormant.

Once you start trading you will need to tell HMRC within 3 months of trading and then things get more complicated.

Whilst you are not trading you are not classed as employed by your new company so your PAYE scheme with the NHS will take care of all your tax needs. I dont believe you would even need to send in a tax return whilst dormant..... Im sure someone will clarify this for us.

[Williams lester]

You would probably benefit from a meeting with an accountant (most will give a free initial meet), as there are several issues you will need to discuss, such as, whether you should be a sole trader or limited company, if limited co. whether you will be caught by IR35, if VAT registration is worthwhile, how to extract profits from your business etc. etc.

[MyAccountantOnline]

do i need to pay any fees (apart from setup fees) to run a company if there is no income from it at all?


Hi Denis

If you set up a company and it remains dormant you still need to prepare dormant company accounts and an annual return - have a read here

http://www.companieshouse.gov.uk/about/gbhtml/gp2.shtml#ch1

http://www.companieshouse.gov.uk/about/gbhtml/gp2.shtml#ch8

Its not a huge amount of work for an accountant if you decide to use an accountant but very costly if you dont submit the accounts/annual return on time.

If you are sure a limited company is the best/only option for you is their really any need to register the company now? It only takes a few hours to get a company formed so may be best to leave for a while.

[DenisCooper]

thanks....

the only reason i wanted to register now was so i didn't loose the name :) just incase someone thought the same one lol.

Sounds good about meeting with an account - will take a look and see what they advise.

I'll also take a look at the dormant options.

Many thanks,
Denis