I am intending to set my own company up in the next three months or so and I need to set up a Limited company which will require another director besides myself. Does anyone here know if I can make my future wife a director when she is on a FLR visa? Note that we are not married yet but will be in a month or so where we will immediately apply for a spouse FLR. Many thanks in advance.
I have a South African buddy at work who is on a FLR and he did say there are restrictions on what you can and cant do.
Good idea OSS, I'm new to the self employment game and its already making me think should I stop where I am, I'm a creature of habit and don't take to change too well . I know from previous experience that I will start to defer doing the paperwork and things associated with it, I'm relying on the missus to do that.
If you are setting up a limited company then technically you are not really self employed as you will be on your own payroll paid a salary and being taxed via PAYE, the main difference is that you will be paying yourself a small salary and drawing regular dividends to provide you with a liveable income. It is a sensible approach though, one thing you need to be aware of are the IR35 rules, you need to show that you are not in fact in disguised employment which means that you usually need to show that you take risk and that you control the terms under which you provide your services. Will you have multiple customers at the same time or will you work on fixed term contracts one after another?
I will just be working for one company in Belgium, invoicing them once per month for my time, lease car and expenses. I also have the possibility of doing some work at weekends for a company I worked for a while back. I'm not really looking forward to getting started, I have told the company in Belgium that I will start on the 1st December but I may have to put it back a month as I want to get the FLR visa out of the way first. I've already made a big mistake telling them I would start then, I could do with a month off before I start a new job. I did read that you are better off starting as a limited company as opposed to a sole trader if you're going to earn over 25k a year. There is so much information on the internet that its confusing and conflicting. I am going to meet my counterpart soon who has been working for the same Belgium company, I need to pick his brains and maybe use the same accountant as he doesn't live a million miles from me. I think once I have an accountant then he can set me on the right path, I don't want to get into trouble with the taxman and the like further down the road.
I was a sole trader, it is better to be a limited company but you need to be sure that you don't fall foul of Inland Revenue rules related to trading, all businesses need to show that they take genuine risk and are genuinely trading, both sole traders and limited companies. It's good that you will be working for a foreign company as that will involve some element of risk, in the IT world many people operate as limited companies, the revenue don't like it if the Salary portion of your income is very very small as reduces their NI contributions take, IR35 was very tough on IT people like me. See this site for some details on IR35 http://www.contractoruk.com/ir35/how_will_i_know_if_i_am_caught_by_ir35.html
I can understand the Inland Revenues concerns and I think I will be doing exactly what they dont want, paying myself a small salary, paying the missus maybe 10k and getting small dividends as you mentioned. As you say, it may be deemed as a risk working for a foreign company, I hope so any way, I don't want any run ins with the IR as they always seem to win. Thanks for the link by the way, interesting and very apt to my set of circumstances.
Companies no longer require two directors, that restriction was lifted a few years ago and you don't need a company secretary for a private limited company.
You're right Howerd, I just did some checking on the internet and the need to have two directors was done away with four years ago. I was though hoping to make the wife a director so I would gain tax concessions and use it as a way to keep more of the money I earn.
I think I can Howerd, I'm new to this game so I am on a steep learning curve, I need to learn enough to keep both myself and the taxman happy. I will be going to see an accountant soon so that I may be lead down the right path of me keeping as much of my money as possible
I think the tax advantages of a limited company depend on your profits. The lower the profit the more likely that a sole trader or partnership would be more tax efficient. As profits rise, then a limited company is more beneficial (form a tax point a view). But there is more paperwork with a limited company, more legislation to adhere to and accountants will charge more for their services to a limited company than a sole trader. In effect, you would seem to be a freelance worker so the two companies that you will work for may only work with other companies (rather than other legal entities) But the big advantage of a limited company is that your legal identity is separate to that of the company; if your company fails then any creditors could not seek any monies from you personally (unless you were fraudulent or reckless) I have never set up a company myself but I have investigated a few fraudulent individuals who have and it is surprising that they can continue in their fraudulent ways without prosecution or any company directorship ban. As an honest individual, I think you have little to worry about.
You will find that the Revenue is pretty good at making sure you get few if any tax breaks, it is very hard for the single man company these days, they have closed things down so tight that there is hardly any benefit in being a one man business these days
Best idea is to talk to people in a similar position to yourself to find out how they manage their affairs, talk to other contractors who are working for the same overseas company.
That's exactly what I will be doing Dave, I have a meeting with one of the other engineers who works for the same company in the next few weeks, I'm hoping he doesn't mind nurse maiding me for a while.
