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Two limited companies at once?

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    Two limited companies at once?

    I stopped contracting at the end of 2018. My limited company is winding down, and I don’t have to pay the corporation tax bill until October (extended from April) this year, which is handy.

    For personal reasons (aging parents in another part of the county), I am considering contracting again. I could of course use my existing limited company, but this would mean paying my corporation tax in April 2019 which I hadn’t budgeted for. Could I open a new limited company to work with whilst the old one winds down?

    Not great financial planning I know, but we only get one set of parents and mine are deteriorating rapidly and could benefit from some basic help a few evenings in the week hence my rushed plan to contract again for a few years.

    Thanks

    #2
    Two limited companies at once?

    Yes, it’s possible.

    Remember that you’ll need to set it up from scratch, so two sets of accounts, double accounting fees, double insurance, VAT registration and returns, etc.

    Edit: circumstances depending on how you’re winding down the existing company.

    Comment


      #3
      Originally posted by meridian View Post
      Yes, it’s possible.

      Remember that you’ll need to set it up from scratch, so two sets of accounts, double accounting fees, double insurance, VAT registration and returns, etc.
      But if the OP is winding up the first one and claiming ER and the second one is doing the same thing as the first, then while it might be possible to do it, they would not be able to claim ER and would have to pay the tax they are currently hoping to avoid.
      …Maybe we ain’t that young anymore

      Comment


        #4
        Thanks

        The first company has been totally inactive with no money going in or out since January.

        Comment


          #5
          the corporation tax bill until October (extended from April) this year, which is handy.
          paying my corporation tax in April 2019 which I hadn’t budgeted for
          Do we assume you've spent your corp tax money or something? It should be sitting in the company untouched as it isn't yours to spend? How did you divi that out as it isn't profit?

          What's going on here?
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Consider if the future contracts are likely to be inside IR35 and/or you only want to be doing it for a year or two, and if so then using an umbrella company may be the easier route than faffing around with two Ltds for the same purpose.

            Get your next contract before deciding. It may take a while, during which other options may present themselves for handling the tax bill (e.g. short term credit), and only when you've got interviews will you be more sure of the IR35 situation, unless public sector and client has determined status for the vacancy.
            Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

            Comment


              #7
              Originally posted by northernladuk View Post
              Do we assume you've spent your corp tax money or something? It should be sitting in the company untouched as it isn't yours to spend? How did you divi that out as it isn't profit?

              What's going on here?

              I'd guess the year end was extended from April to October, delaying the corp tax due date.

              My accountant did same for my Ltd when closing down to go full brolly recently, so only one final set of accounts needed preparing.

              But yes, spending expected corp tax is
              Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

              Comment


                #8
                You do realise that if you extend your accounting period, it doesn't extend the CT payment due date?

                It extends the submission deadline, but the payments are still due as normal, 9 months after the APE.

                Comment


                  #9
                  Originally posted by craigy1874 View Post
                  You do realise that if you extend your accounting period, it doesn't extend the CT payment due date?

                  It extends the submission deadline, but the payments are still due as normal, 9 months after the APE.
                  Oh dear oh dear
                  'CUK forum personality of 2011 - Winner - Yes really!!!!

                  Comment


                    #10
                    Sigh. Based on what you’ve said. Do not open another company.

                    Comment

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