Hi, I have a scenario for which I would be grateful for some advice.
I have friends (married couple) who are taking over a coffee shop where I live.
They are a Ltd Company with just the wife as the director.
I have advised that they should both be Directors as it is a joint venture and that they should both (and 1 employee) be paid through payroll. Or if the husband does not want to be a director then he is an employee and again goes through the payroll.
However the husband for some reason would prefer to be self-employed but this wouldn't be possible would it?
Has he got another stream of income self-employed, or is this his only job?
If he has no other self-employed income and is working just for the coffee shop only I would have thought it was best to put through payroll. If he already has a business that perhaps he hasn't told you about then possibly he could be self employed. Also what hours he is doing at the coffee shop? Is he full-time? It sounds like maybe he hasn't told you everything?...
I am not an accountant so no idea if there are any tax benefits with what he is asking.
Asa general rule (1) , being shareholder and director will be more tax advantageous than being self employed anyway, and in this situation the s/e could come under IR35
(1) Advice should always be sought from an accountant who will advise specifically to their situation.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Hi
To throw my two pennorthworth in - dont just ask if he has another business, as Amanda suggests you would need to find out if they have any other income streams that could or already impact on tax.
Agree with John that he cannot work in this coffee shop as a self employed person.
Also - the 'advice' they have both been given - do they mean just a Director or are they suggesting joint shareholding (whether of course that is split 50/50 is another discussion).
If you dont feel in a position to advise (and I wouldnt without the usual agreement being in place as its an easy way to lose friends when things go awry) - then I would suggest they get advise from a suitably qualified Accountant, especially if they eventually decide to go down the split shareholding route now the Limited is already set up with one shareholder.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I've had a chat with them this afternoon, they were just a bit confused as they have not been in business before. I've pointed them in the right direction and advised making an appointment with an accountant regarding directorships and shares.
I don't really want to get involved as you point out Jo, rather just stay as friends.
Its a good time to get that advice and so hopefully they will thank you for that. Agree friends and business dont generally mix so I think you did right.
Happy New Year by the way. Hope you had a good one
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
OOoooo. My sons' g/f is the same day. She hates it then though - her view is everyone is out partying for New Year when they should be out partying for her birthday!! I have a family full of December birthdays. Happy belated birthday.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Oh hers is the same as my Dad's. I always get separate pressies and wrapping paper. Have to buy the card in about September. Always, always forget to get birthday or plain gift tags and still feel guilty about that even though he is 76 now and past caring. So hard for a child - maybe she should be like the queen and have an official birthday in June as well.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
