Running TWO electrical companies, advice please!

[Sparkysteve82]

Hi Forum,

I'm currently one half of a two man electrical business (shareholder, non-director), we have been going for just over two years, primarily doing domestic with occasional small - medium commercial.

I have a friend who also runs an electrical business, larger than mine, 6 men, more commercial and some industrial, he has informed me his supervisor is leaving and has offered the position to me, he says I can run both businesses from his office, he currently works off shore (wind farms) and wants someone he can trust to keep his business going for when he comes back on shore.

I guess I'm just after some advice on possible pitfalls as this is not your everyday situation.

I must add that he is prepared to make me a shareholder to protect my interests and a substantial wage, however first pitfall is wages, would I be taxed at a higher rate for taking two wages??

Any & All Advice is appreciated

 

[KAS1]

The higher rate always comes into play if you earn over a certain threshold no matter how many companies you draw earnings from IMO

 

[Sparkysteve82]

Thanks KAS1, I need to look closely at what the thresholds are for higher tax rate.

 

[Octopus]

If you are Limited, get paid in dividends rather than PAYE.

 

[snowhead]

Thanks KAS1, I need to look closely at what the thresholds are for higher tax rate.

I would say problems concerning tax are the least of your worries.

What does your business partner say about you also running another business which may or may not be in competition with him?

Or put it this way, what would you think if your business partner did what you are proposing?

Paying higher rate tax isn't a problem, it just means you are earning a lot more money than when you weren't paying it.

 

[Sparkysteve82]

snowhead,

As I have known both parties for 15 years we get along good, we often pass work to each other and sometimes sub-contract to the larger firm or have one of his working with us.

I do have concerns of my business partner (small company) as he does not seem to have the technical knowledge I would expect at his level, struggling to pass insp & test, often feel like I'm carrying him through the jobs.

 

[samillingworth]

If you are comfortable with the conflict of interest then yes there wouldnt be a problem, although you have to looibst the bigger picture here. From a business point of view (bear in mind ive literally started my electricians course today so this is purely from a business perspective)

Would your time be better spent in trying to expand your 'own' conpany to bring a bigger wage home eventually or would you settle for the 2 combined now as it is with obviously all taxes on top. As a general rule of thumb the tax for a second job is 50% over a certain threshold so it does add up, you have to work out for the present and include future interests also