LTD, working separately full-time - save tax??

Scott · 2004-08-30T08:02:05+00:00

Ok - looking at businy a small business that can be operated on part time hours but it has a high turnover and low profit margins. Turnover in excess of £100K. The stock it sells are themselves non taxable. Anyway - I also work full time, and will continue to do so - especially as it will allow me to pay off the business loan sooner rather than later. Anyway - because of the high turnover is it prudent of me to make the business a LTD but I was also thinking - am I able to combine the 2 - buinsess and fullt ime working, and save money by not paying so much tax on my full time employment salary? I was thinking then with the loan, business running costs etc, I could save more money by offsetting against tax. Scott

Aug 30, 2004 22 Replies

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Scott 22 years ago

Too be honest - I got a bit lost - as seems to be alot of people conflicting themselves.

As the moment - the decision is - LTD or stay as sole trader?

Either way - I am looking - if possible - to save on the amount of tax I pay on my full time job.

I understand - if I am right - that this is not possible unles I make a loss and then I can - under circumstances offset this aginst the tax in my full time employment - or carry the loss over in the business and offset against future profits.

Am I correct so far?

Scott

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Peter Saxton 22 years ago

No.

You don't seem to understand the basic principle. You are taxed on your total income less certain losses. You are not taxed on individual sources of income.

Why look to save on the amount of tax you pay on a certain portion of your income but not be bothered about your total tax? It doesn't make sense to have a blinkered approach.

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