Sole Trader Starting Another Company

[snappyfish]

Hi, as title I am self-employed solder trader working alone for the last 5 years. I want to start a new business selling products and assume it's best to start a limited company.

While setting up my current job will continue in self-employment until and hopefully, the new company runs successfully.

Do I run a self-employed and a limited company at the same time?

 

[japancool]

Yes, there's nothing stopping you from doing that, but speak to your accountant regarding the most tax efficient way of taking money out.

 

[The Resolver]

If you run it through a limited company make sure you either have more than one director or have Articles that do not put you as sole Director at risk. See https://www.mr2percent.com/ and scroll down to the Stop Press item. So far as I can tell there has been no appeal against the case although another judge in another court could decide differently. But why take the risk ?

Of course if you appoint another Director you risk stalemate on a decision you wish to make. So best to change the Articles if, as usual, your company is covered by the unamended ModelArticles.

 

[MyAccountantOnline]

.... I want to start a new business selling products and assume it's best to start a limited company.

...

Lots of factors to consider when deciding on the best structure for your business.

Getting it wrong to save a few pounds can be a costly mistake, as an accountant it's something I've seen so many times.

It really is worth getting proper specific professional advice on that.

 

[Lisa Thomas]

Don't make the assumption a Limited Company is best. There will be pros and cons. Speak to your accountant. I can recommend one if you don't have one. Feel free to DM me.

 

[Socio South West]

@snappyfish Assuming you are a good upstanding citizen and make timely declarations of your business affairs, I would say the choice of having both a sole proprietorship and a limited company from which you earn would put a big red flashing light on your tax file, and vastly increase the chance of HMRC investigating you in depth.... and at expense to you, regardless of the final outcome.

Whilst it is perfectly acceptable to do what you suggest, as others have said, get some proper advice from your accountant at this stage to avoid issues down the line.