Splitting Employment between two business - National Insurance Implications
I wonder if you might be able to help.
I am an Accountant, but this is not something that comes up often.
I am involved with a manufactring company, and we are looking to purchase another company.
It does similar things, and would be housed within the same premises.
There would be a separate phone line to the business, separate website, and would continue to be a separate business. It would pay a share of the rent, electric and gas etc. The business has a good brand and has a retail arm, which is the reason we want to keep the business separate.
The business requires employees, and the current employees of the business would not continue - for various reasons, including wanting to retire, too far to travel etc. So there are obviously redundancy and various other problems etc when taking over the business, however my question is regarding ongoing National Insurance.
We currently have the staffing capacity to run both businesses, and would like to split the cost of three of our employees (we have 7, not including the directors).
These employees would be the ones involved with the work of that business, but it would not require all of their time.
One is admin, one is required for running the machines (specific to that business) and one is required for finishing and packaging. The other is in admin - answering the phone for the business, preparing orders, dealing with customer orders, invoicing and bookkeeping etc.
The split, while not 100% accurate, would be done realistically, so each business' cost reflects its actual cost.
The businesses are owned by the same shareholders (although not in exactly the same proportion), and run by the same three directors.
As you can see, there are valid business reasons for the split, however I also realise that there would be national insurance savings for both us and the employees involved, and so I wonder if this is prohibited somewhere, or whether it is ok since there are valid business reasons.
I would be very grateful for any help you could provide, because I don't want to open ourselves up to problems.
All the best.
- Are Sales to Germany considered VAT Taxable turnover for HMRC? 49 2
- Where has Portia gone? 1,711 65
- Is my client risking reputational damage? 232 7
- Is it worth being a limited company if already a higher rate taxpayer? 366 4
- Performance measurement within accounting practice 268 5
- Do I have grounds to dispute our accountant’s fees? 226 6
- New Client wants an Income Certificate for a Mortgage 899 21
- Can i reclaim tax if my fuel cost more than the AFR in a company car 180 3
- transferring from franchisee to ltd comapny 108 1
- Sage line 50 payment before invoice date 192 11
- Best Tax / Accounts Production software 394 10
- Property Purchase in Daughters Name 335 9
- Merging my businesses 142 2
- Getting fees, getting harder? 3,726 73
- Spousal transfer and PPR 518 16
- VAT on commercial property 153 3
- Rogue Accountant 3,051 49
- deceased creditor 211 5
- Corporate member of LLP 281 1
- Investment company 275 6
- Services via intermediaries and new HMRC reporting requirements 782
- RTI - duplicate employee record 539
- Pensions Regulator 445
- How hard is it to reduce a code? 405
- Sage Vat return box 2 309
- Sanzar 306
- Digital marketing focus group 289
- How do you do it 280
- Portia ... Where art thou 273
- Kashflow balance sheet difference 260