Full Time Job plus Ltd Company

Keltic_Warrior

I have a full time job and like a lot of people I see on this forum I would like to try and earn a wee bit extra if I can.

The company I work for in the manufacturing business but my background is varied.

I have been asked by a few people if I would consult for them now and then.

I was thinking of setting up a Ltd company to do this.

Does anyone have and experience of doing this and how best to take money from the company. It will only generate a few hundred pounds a month extra as it is just a few hours at the weekend.

Many thanks in advance

podperson

Is there any particular reason you are wanting to do it as a limited company rather then just on a self-employed basis? To be honest for the number of hours you say you will be doing it sounds like you would be making extra work for yourself by going down that route as you would have to sort out filing all the set up documents (you know of course that you need another person to be director as well?) plus then you will have to do additional accounts for companies house and if you are taking 'drawings' rather then a paye wage from then you would need to work out the tax in a slightly more complicated way as well.

heretolearn_2

For a small amount of earnings you don't want to go the LTd route, as podperson says. Just do it as self employed. You can still operate under a company name if you want to be 'Keltic consulting' for example.

MikeR71

As others have said, you are better a sole trader. I do this from time to time although opportunities are scarce at the moment in my profession.

PlutoinCapricorn

Have a look at www.businesslink.gov.uk, which mentions Businessgateway for Scotland.

I agree that unless there is a compelling reason for setting up a limited company, registering with HMRC as a Sole Trader is your simplest and best option. If you were employing people, or might be liable for debt if you bought stock then couldn't sell it or earned enough to make incorporation a better option, it would be different.

If you were a sole treader, you would need to put aside 20% for income tax and anything else would be yours to spend.

Is there anything in your contract of employment about taking on additional work?

Keltic_Warrior

Thanks for the responses.

I have permission from my current employer so I am OK on that front.

I think a sole trader is the way to go as you are all right about the time / paperwork for going Ltd. I think having an accountant might help. Any ideas on what a decent one would cost ?

20% for tax ? Thats the bit I really need to understand as there everyone says something different.

podperson

20% tax is working it out on the Basic Rate which would apply as this is basically going to be classed as a second job for you. If it took off and you decided to leave your current job and do it full-time then you could apply your tax allowance to it so would be less (although a lot of ones I know like to put aside the 20% to be on safe side and then have a bit spare at the end of the year).
Regarding an accountant I wouldn't think you would need one to start with as if you are only doing a few hours then just need to do some simple book-keeping - there are lots of choices of programs that can help you and if you speak to HMRC they generally have lots of helpful information. Also do you have a Business Gateway or anything similar near you as they can be very helpful as well.

Keltic_Warrior

I think there is one in town.

A wee trip there next week is in order me thinks.

Thanks again for all the support.