How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxadvisor.uk Your Own Question
taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4972
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
54961312
Type Your Tax Question Here...
taxadvisor.uk is online now

UK to answer.To continue, here are my

Resolved Question:

ForCustomerto answer. To continue, here are my other questions:

1. My new business will involve trading in the US selling goods there online. Would it be better to start as a Ltd Co rather than Partnership?

2. If I set up a new Partnership with my partner for the new business and I am still a Director of the Ltd co, do I need to register with HMRC as self employed?

3. Would the official trading date start from the date I register with HMRC as self employed or can it be earlier?

4. Can I still claim expenses used prior to setting up the new Partnership and being registered as Self-Employed?

5. When I change the Partnership to Ltd Co, do I become PAYE so de-register as self-employed?

Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for requesting I help you with your questions 1. My new business will involve trading in the US selling goods there online. Would it be better to start as a Ltd Co rather than Partnership?[ans] Operating as a LTD company gives you some protection of limited liabilty. If you are likely to trade with customers in countries where the culture is one of litigation, then you may wish to trade as a LTD company from the beginning. With certain trades, suppliers and customers like to deal with LTD companies rather than individuals. 2. If I set up a new Partnership with my partner for the new business and I am still a Director of the Ltd co, do I need to register with HMRC as self employed?[a] If you are already not registered for self assessment, then you need to register for self assessment as self employed. If you are already registered and have a personal UTR number as opposed to UTD for your LTD company, then you register with HMRC as sole trader or register the partnership. 3. Would the official trading date start from the date I register with HMRC as self employed or can it be earlier?[a] It can be earlier but you should register within 90 days of going self employedMore information on this can be found herehttps://www.gov.uk/register-for-self-assessment/self-employed 4. Can I still claim expenses used prior to setting up the new Partnership and being registered as Self-Employed?[a] Yes you can provided they are related to that business (start-up costs) 5. When I change the Partnership to Ltd Co, do I become PAYE so de-register as self-employed?[a] When you change the operation from running as a partneship to a LTD company, you would have to register the company as an Employer for PAYE purposes.You woudl notify HMRC that you have ceased to be self employed when you file supplementary pages SA103 - self employed with you tax return. I hope this is helpful and answers your question.If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.

As I will be getting supplies from China and actually trading in the US rather than UK, and also from your advice, it sounds like it is better to start as a LTD Co?

1. Can I claim expenses paid prior to setting up the new Ltd as I could if I had set up as a Partnership?

2. My partner and myself have both just left our day jobs so if we set up as Directors of a new Ltd Co, would that effectively work as PAYE rather than self employed? ie do we need to register anything with the HMRC? We both already submit annual self assessment returns (mine for income from current Ltd Co as that is not done by PAYE) and my partner for rental property income tax. Do we need to do anything else if we both have UTR numbers?

I think we are confused as to how we would be classified. Under LTD would we be employed as PAYE under the company rather than classified as Self Employed for tax purposes?

3. For start up costs, do we put money into the new Ltd Co by way of a Director's loan eg if we were put in £15,000 - £20,000 which can then be paid back at a later date?

Thank you.

Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply[q]As I will be getting supplies from China and actually trading in the US rather than UK, and also from your advice, it sounds like it is better to start as a LTD Co? 1. Can I claim expenses paid prior to setting up the new Ltd as I could if I had set up as a Partnership?[a]You can claim expenses paid prior to setting up a new company as part of set-up/start-up costs 2. My partner and myself have both just left our day jobs so if we set up as Directors of a new Ltd Co, would that effectively work as PAYE rather than self employed? ie do we need to register anything with the HMRC? We both already submit annual self assessment returns (mine for income from current Ltd Co as that is not done by PAYE) and my partner for rental property income tax. Do we need to do anything else if we both have UTR numbers?[a]If you start working for the LTD company, then you should register the company as new employer and operate PAYE for salaries. You can't be self employed in your own company. You don't need to do anything else other than through your company notify HMRC when your employment starts. I think we are confused as to how we would be classified. Under LTD would we be employed as PAYE under the company rather than classified as Self Employed for tax purposes?[a]I have already answered this..you would be employees of the company and pay tax on your earnings under PAYE and you won't be classified as self-employed [q]3. For start up costs, do we put money into the new Ltd Co by way of a Director's loan eg if we were put in £15,000 - £20,000 which can then be paid back at a later date?[a]Advisable to treat capital injection as directors' loan as you would be able to draw against it as and when company finances allow without tax implications. I hope this is helpful and answers your question.I will appreciate if you would kindly rate my service/accept the service I have provided before you leave the site, to ensure I get credited for it by Just Answer.
taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes.

Related Tax Questions