Contractor Moving to Permanent Position - Limited Company Advise?

[everfor]

Hi,
I am IT Contractor, having a less than year limited company. Now i am moving to Permanent position, Can anybody advise me, what are steps need to taken in limited company side, like interms of accounting, taxation? should i need inform to HRMC or anybody else? But in longterm i'll move to contract again. Please advise

 

[Truemanbrown]

One question I would ask you is what profit and loss account reserves do you have in the company? A second

If you are planning to move back to a contract again in the long-term you could keep the company and leave it as dormant until you need it again. If you take this route then you will need to prepare an annual return each year (costing you £15 per annum) and submit dormant accounts to Companies House and similar to the Inland Revenue with the Corporation Tax Return.

However, it is fairly simple and cheap now to set up a new company when needed.

If you decide to close it down, then you need to inform Companies House on Form DC01 (together with a cheque for £10). I imagine the most important thing if you do close down the company is drawing out the profits from the company in the most tax efficient way (hence the two questions above)?

 

[Williams lester]

You will need to complete full accounts and a corporation tax return for HMRC.

For companies house, there is no need to supply accounts if you intend to have the company struck off (always my preferred option), and the fee will be £10.

 

[everfor]

Thanks for reply. I have plan go for dormant option after this year. One more question please, After i start the permanent role, should i need to submit p45 to new employer? After generating p45 form from my ltd company. Should i stop taking the director salary or dividend in my limited company?

 

[elaine@cheapaccounting]

yes you need a P45 and stop taking a salary from your limited.

Dividends can be taken if there are sufficient retained profits (don't forget your CT bill!)

 

[Truemanbrown]

Thanks for reply. I have plan go for dormant option after this year. One more question please, After i start the permanent role, should i need to submit p45 to new employer? After generating p45 form from my ltd company. Should i stop taking the director salary or dividend in my limited company?

Obviously, when drawing dividends from the company you need to look at your personal tax situation. In particular, you should be wary of drawing too much in the way of dividends so that you become a higher rate taxpayer.

Your accountant should be able to give you advise on this.