Limited Company?

EEP103

I currently have a full time job, where I pay NI and Tax through my employer.

My previous employer has asked me to do some freelance work for them (lecturing on their training courses) which should end up earning me around £6k next year on top of £3.5k this year.

Is their a benefit to starting a ltd company to put this through? If so, can anyone give me some advice on how I would do it?

Thanks

cotswoldaccountant

It is unlikely to be beneficial to set up a limited company for such a small turnover. Your profit will not be sufficient to pay Class 4 National Insurance (one of the tax savings involved with setting up a limited company which is not relevant for you) and accountancy fees are usuallly in the region of £1k minimum for a small limited company, which would reduce your profit considerably.

It would be better to register as self employed with HMRC. You will need to pay Class 2 National Insurance, but you may be entitled to an exemption if you can demonstrate that your profit for each tax year is less than £5,725 (do you have any expenses to set against your £6k turnover for next year which may reduce it to below this level?)

You would need to ensure that you are not actually an employee of the company you intend to lecture for. Have a look at this link http://www.hmrc.gov.uk/employment-status/#1

londonTiger

dont bother with forming a ltd company. It will be an admin nightmare also you will have to pay 250 to the accountant to do your books. When you become a ltd company you have a lot of responsibility to companies house and your business regardless of how big or small.

unless your clients specifically require you to be a ltd company (most should be OK with you being just a sole trader).