Tax advice on Limited Company

Original Post:

J

johnbiondini

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Sep 14, 2022
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  • #1
    Hi,
    Back in March I took an outside IR35 contract and was advised to open a Limited Company for it.
    I set everything up and worked 2 weeks until I realised it wasn't the right fit for me and I had a better offer from an employer which meant I left the contract with only 2 weeks paid.
    Does anyone know what's the best way to pay these taxes and close my Limited Company? Is there a way I can add the taxes for it into the taxes I pay with my current company as an employee?
    Thanks!
     
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    ChrisCallaghan

    ChrisCallaghan

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  • #2
    Hi,

    Closing the company is the easy part, assuming there are no unpaid debts. See below:

    www.gov.uk

    Strike off your limited company from the Companies Register

    How to close down your limited company by getting it struck off the Companies Register
    www.gov.uk www.gov.uk

    As for the accounts, I would use an accountant, but I'm sure others will comment with some more practical advice shortly.
     
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    UK Contractor Accountant

    UK Contractor Accountant

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  • #3
    johnbiondini said:
    Is there a way I can add the taxes for it into the taxes I pay with my current company as an employee?
    Click to expand...
    No
    johnbiondini said:
    Does anyone know what's the best way to pay these taxes and close my Limited Company?
    Click to expand...
    Are you sure you want to close the company?

    I have had several cases lately where Contractors have started using their PSC again after having mothballed them to take permie role which didn't work out.
     
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    ChrisCallaghan

    ChrisCallaghan

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  • #4
    UK Contractor Accountant said:
    I have had several cases lately where Contractors have started using their PSC again after having mothballed them to take permie role which didn't work out.
    Click to expand...
    Good point. I've had a couple of clients in the last year who closed their PSC companies after taking on a permanent role, who were then offered work later that required a limited company,
     
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    ChrisCallaghan

    ChrisCallaghan

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  • #7
    UK Contractor Accountant said:
    you might want to change 'Entrepreneur's Relief' to 'Business Asset Disposal Relief' in your Blog!
    Click to expand...

    That name change still irritates me, because everyone still refers to it as ER! Two and half years in and I'm still having to repeatedly say "Business Asset Disposal Relief, previously known as Entrepreneurs Relief".... which is a bit of a mouthful!
     
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    UK Contractor Accountant

    UK Contractor Accountant

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  • #8
    ChrisCallaghan said:
    That name change still irritates me, because everyone still refers to it as ER! Two and half years in and I'm still having to repeatedly say "Business Asset Disposal Relief, previously known as Entrepreneurs Relief".... which is a bit of a mouthful!
    Click to expand...
    ER was viewed as being for the wealthy elite with a limit of £10M.

    So changed it to BADR with £1M lifetime limit
     
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    ChrisCallaghan

    ChrisCallaghan

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  • #9
    UK Contractor Accountant said:
    ER was viewed as being for the wealthy elite with a limit of £10M.

    So changed it to BADR with £1M lifetime limit
    Click to expand...

    The lifetime limit change made sense to me, in light of trying to "rebrand" it, but the name change is just an irritation!

    Entrepreneurs Relief made sense. Directors retire a successful business, MVL out, and because they have been entrepreneurial they get a tax break.

    Business Asset Disposal Relief makes no sense as a name to contractors going through an MVL, as they are not disposing of any assets!

    Rant over! ?
     
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    UK Contractor Accountant

    UK Contractor Accountant

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  • #10
    ChrisCallaghan said:
    Entrepreneurs Relief made sense. Directors retire a successful business, MVL out, and because they have been entrepreneurial they get a tax break.

    Business Asset Disposal Relief makes no sense as a name to contractors going through an MVL, as they are not disposing of any assets!
    Click to expand...
    more of irritation to me is that you toil away as an entrepreneur all your working life and exit with 10% charge on £1M max yet if you are an Investor (not connected with the company) you get £10M Investors Relief for sitting on your arse doing nothing!

    Yep - rant over.
     
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