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.
- Marriage Allowance Transfer 224 9
- Company accounts for £350 593 18
- new dividend allowance 166 5
- Identity Checks 261 8
- Allowable expenses on retal property 486 14
- Disclosure of 2014 corporation tax refund in 2015 accounts 296 4
- Company leaving VAT group 73 2
- Am I the only one who finds this annoying 954 38
- Redundancy pay 117 2
- Bad debts 123 4
- Sage Drive Queue.dta file lock out 614 13
- Directors Loan Account Question 275 11
- Cash bashed (FRS) vs cash accounting (standard VAT)? 207 3
- Seeking advice: VAT Threshold / Turnover 70 1
- VAT Receipts 90 1
- VAT on farm machinery sold 219 3
- Running Sage on a Mac 225 5
- Refreshments provided at event: client entertainment or not? 315 7
- Do I need to file a tax return whilst working abroad? 182 3
- HMRC - never move address as an agent 947 18
- Motor Traders Assistant Bookkeeping Programme queries 296
- Continuity of practice-ACCA 284
- FRS 101 Software 272
- Tracesmart/Lexis Nexis AML software? Any opinions? 268
- French ConnectionUK 218
- Fundraising for friend - minimise tax? 201
- Can anyone explain Indian Minimum Alternate Tax 197
- Recommended International mobile phone coverage and costs? 195
- APN's 181
- Penalties for late filing of P11D forms 173