bad accountancy advice, help now needed

jct126

Hi Guys

I hope someone can try and help me with this one, it's a bit complicated, so i hope i explain ok...

Just over a year ago, my dad bought a restaurant as part of his retirement plan. My dad has a very successful business as a sole trader.

We went to see his accountant, as my husband and i were going to run the business, and the accountant said we should set the restaurant up as a limited company. Which is what we did, with my husband and i as directors and my dad as a share holder.

My dad has now been stung for tax on all the money he used to buy the restauarnt with and all the money he has put into the restaurant to pay our wages since we took over. Whilst the restaurant is doing ok, trade is hit and miss, so we regularly have top ups from my dad and will probably need to continue to do so for a little while longer.

So here's where i need your advice...

Is there anyway to join the limited company with my dads sole trader business, so that my dad is in charge of both, or could we create a new limited company and have 'trading as' names for the businesses?

Any advice would be great, thank you sooo much x

Pennywise

We need more information. Who has told you that he is being "stung" for tax on money he is paying into the restaurant - that makes no sense at all - investing into a business isn't a taxable matter at all. Him putting money in shouldn't affect his tax bill.

As for the second part, yes of course it is possible to change the structure - the company can be wound up and your dad can "buy" the restaurant from your limited company and then continue to operate it as a sole trader. It may be complicated and you'll have professional fees etc to do it, but it is certainly possible. I'm not entirely sure why that would help though.

Perhaps you could give a little more flesh on the bones of your question and either myself or other posters here will be able to help further.

slipp_digby

why 'bad' accountancy advice?

what do you beleive the accountant should have advised you at the time?

what are the benefits you believe you would gain from operating through a single ltd company?

It may be the purpose of the advice the accountant gave was to limit any liability on your father and minimse risk, hence the ltd company structure. Joining a successful sole trade with a restaurant which is on the face of it operating at a loss might be a very risky matter.

as penny wise rightly says, you dont get taxed on money invested in a company, nor on wages so I can't understand why he would get 'stung' on tax.