Looking to set up a separate business whilst in employment

AuntyJean

I am currently semi-retired and working for a company 3 days per week. However, I am looking to run a holiday let but as a business rather than adding it as income to my current tax. Is this possible? Where do I start?

DullGreyGuy

So you own the property already? Or someone going to lend you a property to operate as a let?

A business can take a number of legal structures; a sole trader is the most common but then there is no separation between you and the business so all profit is declarable personally and so will be on top of your current income. 

A Limited company is another option which is an entity in its own right. 'It will have to pay corporation tax on its earning but when you remove the net profits and thus pay your own tax on the drawings is your choice if you're wanting to delay 

Bookworm105

if you (personally) already own the property then you cannot exclude the holiday let income from your own personal tax position as legally the money belongs to you alone

if you don't like that (or don't own it) then you could set up a Ltd company as the "the business" but you will find the costs (and tax) of doing so will absorb most of your profit until you reach actual retirement.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6595209/looking-to-set-up-a-separate-business-whilst-in-employment

Do you already own the property that is proposed to be the holiday let?

If so, that income is yours and will need to be declared via your self assessment.

If you are buying a new property for the holiday let, then the new business could be set up as a Ltd Co. which would buy the property and then let the property out and take the income. The Ltd Co. may then pay you a salary or retain the profits and pay corporation tax. Dividends can be paid out on the retained profits after corporation tax.

If you already own the property, the Ltd Co. could buy the property from you but the appropriate stamp duty would become due on that transaction.