Business start-up

patman99

Basically, with a limited company, YOU become an employee (just like working for someone). The company is legally an entity in itself. I would therefore be PAYE and not S/E (I have had lengthy discussions with both HMRC). As for dividends based on profit, the directors decide whether the company pays a dividend, and if so, how much.

It could be worth while starting-up part-time. It is something that may work. Bear in mind that for the last 16 years I haveworked in engineering (a dieing trade) and have no wish to spend the next 24 years slowly going deaf working in the same envoroment when I know that I can do better than that.
Up till now, I've had no incentive to really go for it when trying-out business ideas as I've always had a job to fall-back on. Now, it is a different matter.

motorguy

patman99 wrote: »

Basically, with a limited company, YOU become an employee (just like working for someone). The company is legally an entity in itself. I would therefore be PAYE and not S/E (I have had lengthy discussions with both HMRC). As for dividends based on profit, the directors decide whether the company pays a dividend, and if so, how much.

Yes, we know how a limited company works, the point was that you cant pay yourself as an 'employee' if theres no money in the bank account. Your exact comment was 'if we set-up as a limited company, we become employees, and as such, can pay ourselves nmw'. There may be many months at the start of your business where you cant pay yourself a wage at all.

patman99 wrote: »

It could be worth while starting-up part-time. It is something that may work. Bear in mind that for the last 16 years I haveworked in engineering (a dieing trade) and have no wish to spend the next 24 years slowly going deaf working in the same envoroment when I know that I can do better than that.
Up till now, I've had no incentive to really go for it when trying-out business ideas as I've always had a job to fall-back on. Now, it is a different matter.

I think all we're trying to say is that its great that you have the spirit and drive to do this, but you could blow an awful lot of money finding out its a bad idea. By starting part time, working from home and seeing how it goes, you've a better chance of bailing out with little loss, rather than discovering 6 months into a 3 year lease of a business unit that its not working.

It would be worthwhile getting a job even in a call centre or tescos just to get some money coming in, rather than using up your redundancy money just to pay your cost of living bills, then do your computer thingy evenings and weekends.

paulwf

patman99 wrote: »

Basically, with a limited company, YOU become an employee (just like working for someone). The company is legally an entity in itself. I would therefore be PAYE and not S/E (I have had lengthy discussions with both HMRC). As for dividends based on profit, the directors decide whether the company pays a dividend, and if so, how much.

This is a genuine question as I haven't a clue how WTCs work...if the business was highly profitable would they really let you pay yourself NMW and stockpile money in the bank account rather than draw a dividend?

For all I know this may be possible...it would just seem odd to me if this was allowed because surely every director would be looking to exploit that loophole?

motorguy

paulwf wrote: »

This is a genuine question as I haven't a clue how WTCs work...if the business was highly profitable would they really let you pay yourself NMW and stockpile money in the bank account rather than draw a dividend?

For all I know this may be possible...it would just seem odd to me if this was allowed because surely every director would be looking to exploit that loophole?

I suspect the flaw in the O/P's plan is that to be an employee of his own Limited Company, then he'll have to be a director, which would be picked up by Social Services. From memory, when i was unemployed i had to declare if i was a company director. However there are ways around that, but if your business is making that little money that its worth your while claiming WTC then you'd be better off working for TESCO's.

patman99

Having steered my potential business partner to the forums mentioned in some of the above posts, we have both come to the conclusion that starting such an enterprise full-time is a no-goer. A s I am now out of work, I can work 16 hours per week before my JSA is affected. So I intend to print and distribute leaflets to local businesses with a view to starting part-time. I will also be ramping-up the amount of stuff I have on Amazon. So long as I stick within the 16 hours allowed, then I don't mind if I earn over the £5 threshold and loose £1 of benefits for every £1 I earn, as I then have the satisfaction of knowing that each £1 is one I haven't cost the tax payer.

There is a reason behind all this, when going for job interviews it is much better to tell a prospective employer that you have been keeping active rather than just sitting watching Sky TV all day like most of the unemployed people that I know.