Numpty question time.....

[pmeswani]

It's not often I get to ask some numpty question, and before anyone asks, yes I am now considering a change of Accountant.

I am looking to incorporate a Plan B into my Business by doing some part-time photography. I have already been told by my Insurance company about an increase in premiums (which is fair enough). The other question I need to ask is what do I need to do from an Accounting point of view? Can I assume that I need to inform Company House about the additional use of business? Can I also assume that unless I hit the VAT (FRS) threshold limit I don't need to worry about notifying HMRC?

Is it unrealistic for me to charge my company a "Usage Fee" of my personal DSLR camera until such a time that I buy a Camera through the business? The photo editing software belongs to me, but don't plan on charging the business for using it, but I may buy a newer version of the software as a business expense if needed.

I am just looking to cover all basis and making sure I have all the facts and sorry for being a complete numpty on this occasion.

Ta.

[SimonMac]

Why are you integrating them?

[Clare@InTouch]

You can add another SIC code to Companies House when you file your annual return.

You can charge the company for the use of your camera, but then you'd need to declare the income on your tax return, so there's no real benefit. You could sell your current camera to the company for market value instead, and assuming there's no private use then there'd be no benefit in kind.

[pmeswani]

Why are you integrating them?

Because I am hoping they can answer the questions.

I pay them above average amount to do most of my Accounting for the year, from processing my PAYE, VAT Returns, Companies House Filing, Corporation Tax Returns, Self Assessment, raise an Invoice to clients amongst other things. (Yes I am still in control of my business, and it is in my name, I am paying for the convenience more than anything else! And I know I should make time to learn how to do my own Accounting, but I don't have the patience for it, and I know I will make lots of mistakes!).

EDIT: And yes, I am still the signatory for the paperwork, and have control of the Bank Account.

[pmeswani]

You can add another SIC code to Companies House when you file your annual return.

You can charge the company for the use of your camera, but then you'd need to declare the income on your tax return, so there's no real benefit. You could sell your current camera to the company for market value instead, and assuming there's no private use then there'd be no benefit in kind.

Thanks for the information Clare. I won't charge the business in that case for the use of the camera in that case, as there is no significant benefit. I want to keep my current DSLR as personal as possible, and buy a professional one later on down the line for the business. So, do I need to worry about the VAT FRS Scheme that I am? I don't plan on going above the VAT FRS threshold in the current financial year.

[TheFaQQer]

Why are you integrating them?

Because I am hoping they can answer the questions.

Not convinced that answers the question - how does integrating a photography business into your IT business help answer questions. Looks like it creates more than it answers

[Jeremiah@RHJAccountants]

If you have different business sectors under FRS you must choose the business sector that best describes your main activity and apply that FRS percentage to your total turnover.

See the link form HMRC website

HM Revenue & Customs: Flat Rate Scheme for VAT

Hope that helps

[Nixon Williams]

So, do I need to worry about the VAT FRS Scheme that I am? I don't plan on going above the VAT FRS threshold in the current financial year.

You would only need to withdraw from the Flat Rate VAT scheme if your gross turnover exceeded £230,000 in the year.

Whether you need to change your FRS percentage would depend on the proportion each business contributes to the overall turnover.

When the 'new' business contributes a larger part of the overall business, then you may need to change.

If and when you do change I would suggest disclosing this to HMRC when you apply to change the rate, then if they try to challenge it in the future you have provided full disclosure of the facts.

Alan

PS - The code at Companies House is only for statistics, it does not give any validity to any new business that you undertake, so simply adding a new SIC code when you do the next Annual Return will be sufficient.

[pmeswani]

Not convinced that answers the question - how does integrating a photography business into your IT business help answer questions. Looks like it creates more than it answers

The main reason why I want to integrate my Photography work into my IT Ltd Business is to reduce the amount of paperwork, Accounting Fees, hassle of opening a new Business Bank Account and Insurance costs. (My Insurance provider is charging me 76 pounds extra on my premiums, where as if I went down a different insurance company, it would cost me nearer to 200 pounds to get insurance. To me that's a significant saving). I also want to bring in a different income stream into the business as well, and I hope that putting the work through the business will add some form of credance / reputation to my work as well as getting the right level of insurance cover I need. If there is an Accounting reason why I can't do it, then I will go down the route of starting up a new Company for the photography work and pay the Accountant to do my annual returns when needed. If there is a legal reason why I can't do it, then I am happy to hear it.

Unless the Law has changed over the past 10 years, I know one of my previous employers integrated a Legal Business into an IT Services Business. I am using that basis as a reason for asking the question to my Accountant about what I need to do to add the Photography side of my work into the Business.

[Nixon Williams]

If there is an Accounting reason why I can't do it, then I will go down the route of starting up a new Company for the photography work and pay the Accountant to do my annual returns when needed. If there is a legal reason why I can't do it, then I am happy to hear it.

There is no legal or accounting reason why you cannot combine both business activities through the one limited company.

Certainly the accounting may be easier if they are separate but that is the only consideration.

Alan