Limited Company Headache-Advice Needed

eyelander911

I have been planning to open up a limited company for some time now, to save on tax as I am a self employed at the moment.
I told my employers not to pay me until I have set up the company-(It has been a few months as I havent given it priority)

I have spoken to a few accountants about this,but they seem to disagree.My question is this:If I open the company now, can I invoice my employers for the work that has been done in the last few months in the name of the company.
Or else should I purchase a limited company that was started before the work was done?
Does anyone have a solution to my problem?
Thank You

Robert_Sterling_3

I do not know what the legal position is but which ever way you look at it you have done some work for your employer. The work was not done for them by your company.

grumpyoldgit_2

1. Regardless of whether the company is new or already exists your status will not have changed retrospectively - I take it you intend to be a Director and take advantage of corporation tax and dividends to reduce your tax bill? I think HMRC would have a field day with you if you tried that one.

2. I may be off beam as to your current status but here goes anyway - You mention your employers - if you only work for one person/company it is a moot point as to whether you are self-employed or an employee; and HMRC will also challenge you if you attempt to do so as a one man limited company working for one company.

I think you need advice from a competent tax lawyer before you finally decide. Or why not ask HMRC? I always found Inland Revenue (as they were then) to be very helpful and willing to explain liabilities in very great detail - we even had one of their advisors come to our office to help us set up systems etc at no charge to us.

GoG

Pennywise

eyelander911 wrote:

I have been planning to open up a limited company for some time now, to save on tax as I am a self employed at the moment.
I told my employers not to pay me until I have set up the company-(It has been a few months as I havent given it priority)

I have spoken to a few accountants about this,but they seem to disagree.My question is this:If I open the company now, can I invoice my employers for the work that has been done in the last few months in the name of the company.
Or else should I purchase a limited company that was started before the work was done?
Does anyone have a solution to my problem?
Thank You

Even if you did buy a limited company that had been formed a few months ago, it still won't achieve what you want. You weren't a director and shareholder of it were you? If you back-date official documents you are committing fraud. The fact is you are an employee or sole trader until your limited company is properly formed. By delaying the formation or acquisition of a limited company, you have given away the benefits of limited liability. As others have said, you need proper advice as to whether the position really is self employment at all - even with a limited company, you may find that IR35 applies which means you have to pay yourself wages, paying tax and NIC, and not dividends. I'm afraid you haven't done yourself any favours by delaying in this case.

Robert_Sterling_3

It is not often that an MSE query produces such a clear cut and unanimous and unequivocal response.