Setting up as a Limited Company - worth doing?

[Davebhoy]

My partner has been self-employed for 8 or 9 years, she has a communications business that turned over £100,000 last year. She's set up as a sole trader at the moment and has recently registered for VAT.

I do her very basic accounts and tax return, but now her business is VAT registered I am setting her up on an accounts software package the is compliant with the new HMRC rules. I have experience of book keeping and some accounting and I'm studying for the ACCA accountancy qualifications, I've passed 2 of the 3 knowledge exams. Otherwise I am a house husband so I have no income at all.

We aren't married but will be entering into a civil partnership when the law changes at the end of the year.

I know that without knowing our full circumstances it might not be a straightforward question to ask but would it be worthwhile thinking about setting up a limited company for her business? Is it worth speaking to an accountant to wok out the best company structure and how best to pay me for my work for the company?

Thanks for any advice

[northernladuk]

The last line of all that nails it.

[CryingSheep]

My partner has been self-employed for 8 or 9 years, she has a communications business that turned over £100,000 last year. She's set up as a sole trader at the moment and has recently registered for VAT.

I do her very basic accounts and tax return, but now her business is VAT registered I am setting her up on an accounts software package the is compliant with the new HMRC rules. I have experience of book keeping and some accounting and I'm studying for the ACCA accountancy qualifications, I've passed 2 of the 3 knowledge exams. Otherwise I am a house husband so I have no income at all.

We aren't married but will be entering into a civil partnership when the law changes at the end of the year.

I know that without knowing our full circumstances it might not be a straightforward question to ask but would it be worthwhile thinking about setting up a limited company for her business? Is it worth speaking to an accountant to wok out the best company structure and how best to pay me for my work for the company?

Thanks for any advice

I think with that turnover, limited company is the way to go... specially if you are helping her out and you don't have any other income. She can pay you a small salary and some dividends for your work what would help keep things as tax efficient as possible. I believe if you already have a book keeping software, have the time and will, and you said you have some experience of book keeping you can learn all the "tricks" online on your own. But of course if you don't feel confident enough you should talk to an accountant...

[northernladuk]

I think with that turnout, limited company is the way to go... specially if you are helping her out and you don't have any other income. She can pay you a small salary and some dividends for your work what would help keep things as tax efficient as possible. I believe if you already have a book keeping software, have the time and will, and you said you have some experience of book keeping you can learn all the "tricks" online on your own. But of course if you don't feel confident enough you should talk to an accountant...

You sure the dividends are a good idea while they aren't married?

Accountant is a must for at least the first year and Free agent will make it a doddle.

[CryingSheep]

You sure the dividends are a good idea while they aren't married?

Accountant is a must for at least the first year and Free agent will make it a doddle.

There is always risks involved in paying dividends to a partner, being married, civil partnership or nothing at all doesn't change much that risk from my perspective.

Most important is that specially the OPs partner is aware of the risks involved and accept it or not.

About an accountant being a must, each person is different, and different business might have different complexities. Personally using FA and having a very simple business, I don't see the point of paying to someone to fill a few boxes and press a few buttons on FA for you, but like I said you need some free time and the will to read, explore and learn.

[BR14]

There is always risks involved in paying dividends to a partner, being married, civil partnership or nothing at all doesn't change much that risk from my perspective.

Most important is that specially the OPs partner is aware of the risks involved and accept it or not.

About an accountant being a must, each person is different, and different business might have different complexities. Personally using FA and having a very simple business, I don't see the point of paying to someone to fill a few boxes and press a few buttons on FA for you, but like I said you need some free time and the will to read, explore and learn.

and in English?

[northernladuk]

There is always risks involved in paying dividends to a partner, being married, civil partnership or nothing at all doesn't change much that risk from my perspective.
.

Why not from your perspective? Does the settlements legislation not apply to you?

No mention of making him a director either?

You just guessing with that advice?

[CryingSheep]

Why not from your perspective? Does the settlements legislation not apply to you?

No mention of making him a director either?

You just guessing with that advice?

If, like he said, OP is helping managing the business, doing the books etc. why paying a small salary and some dividends would fall into the settlements legislation?

[wattaj]

Why not from your perspective? Does the settlements legislation not apply to you?

The settlements legislation applies to *gifts* of shares. Setting up a completely new limited company would not have this problem... the partner would just throw in the £1 initial cost a of a share.

Have I misunderstood the point that you were making?

[Jess inniAccounts]

My partner has been self-employed for 8 or 9 years, she has a communications business that turned over £100,000 last year. She's set up as a sole trader at the moment and has recently registered for VAT.

I do her very basic accounts and tax return, but now her business is VAT registered I am setting her up on an accounts software package the is compliant with the new HMRC rules. I have experience of book keeping and some accounting and I'm studying for the ACCA accountancy qualifications, I've passed 2 of the 3 knowledge exams. Otherwise I am a house husband so I have no income at all.

We aren't married but will be entering into a civil partnership when the law changes at the end of the year.

I know that without knowing our full circumstances it might not be a straightforward question to ask but would it be worthwhile thinking about setting up a limited company for her business? Is it worth speaking to an accountant to wok out the best company structure and how best to pay me for my work for the company?

Thanks for any advice

It sounds like a limited company is the way to go for you guys, without knowing your full circumstances, it would be hard to say for definite of course.

The investment of an accountant for the first year will more than pay for itself in the long run knowledge and tax-wise. If you then wanted to go it alone, you can take that knowledge away with you into yr 2 etc.