Setting up a Limited Company as Consultant(s)

[Clariman]

My wife and I have recently retired from full-time work in our 50s. I have been approached about doing some part-time, self-employed business consulting work. This is pretty much what I thought I would do anyway so am exploring it. Mrs C also has some ideas for some arts-related projects she is considering. I also have related arts skills too. We also have a couple of holiday lets which we operate as a trade (and split it across our tax returns).

So I was wondering whether it would make sense to create a single Limited Company to address all 3 i.e. embrace business consulting, property and arts work that we might do. Or would it be better to keep the 3 things separate?

If one has more than one limited company that share resources (e.g. home office, computer, phone), how do you work out what costs you apportion to which business?

Being self-employed in any capacity is new to both of us, so any pointers, gotchas, ideas would be much appreciated.

Thanks
Clariman

[RedSnapper]

One issue to consider that might mitigate against running all three businesses as a single entity is VAT. If each business individually does not breach the threshold you won't need to register, charge, and suffer the additional costs associated with running a VAT registered business if they are run entirely separately. Conflate them into a single business and you may need to register if the overall turnover breaches the threshold.

I have a friend who runs a graphic design business and is also a professional artist. He runs the designs business as a LTD and is VAT registered for that. For the art side he is self-employed as a sole trader and is not VAT registered.

[moorfield]

Research as much as you can IR35, PAYE, NIC and VAT administration for small ltd cos. and find a good accountant to talk to! I would suggest initially to put your consulting work through an umbrella company, who will manage all that for you, and Mrs C to perhaps operate as a sole trader.
Avoid moving your holiday lets into a ltd co arrangement I think that could be a taxation minefield ...

M

[Slarti]

For the consulting work a Ltd company could well be a good idea as then it is clearer what is business and what is not and it looks more professional.

Also, some businesses will not deal with a sole trader.

If you are doing business to business consulting then VAT registration could be a good idea as your customers won't care, they can recover the VAT, but the advantage to you of being able to recover VAT on expenses could be high, depending on what you are doing and where.

I wouldn't put the 3 business streams into one company as I suspect that it would just complicate things.

Depending on what the arts related projects are, it may be worth protecting yourselves from liability with a Ltd company, or it may not.

Oh, and for the consultancy, think about professional indemnity insurance.

I used to have my own company and do the book keeping for another that I was a 50% shareholder in. I made a monthly charge for everything I did for the other company which covered office, computer, phone, unless there were exceptional expenses, both the monthly charge and the exceptionals were invoiced.

I'd 2nd an accountant used to dealing with the self employed.

Slarti