Question about a new business

[Fatcat12345]

Hi guys.

My husband has his own engineering consultancy business - we are 70% him and 30% me directors. I am thinking of starting my own bookkeeping business too.

Can my business invoice his business for services provided i.e. Bookkeeping, VAT returns, payroll, Dividend paperwork, etc. if it is the only client my new business will have until I find more clients?

Yes of course, assuming you are providing the services you mention of course?

As above. Yes you can providing you do actually provide those services to his business and are capable of fulfilling those services efficiently.

I am actually already doing all the bookkeeping, admin and other work for the business. Realistically, how much can I charge per month though.

I am currently on the payroll of his business, if I can take myself off that payroll it will save his business money too and then invoice his business say £1,500 - £2,000 per month instead, is that possible?

As you are related persons, it will have to be at the market rate, whatever that is

Why doesn’t he get quotes for outsourcing the services you mention, then you will know what is reasonable for the bookkeeping business to charge?

Separately, as the new business will be charging this to the current business instead of you being on payroll, how will you get an income?

Providing you invoice at a realistic market rate for your services and it's all above board that's fine.

How many hours per week do you realistically undertake ?
i.e. do you work 10 hours per week which equates to circa 40 hours per month?

£40 per hour x 40 = £1,600
What do other bookeepers in your area charge? How many hours are you working etc. What will you be charging other clients?

You may also fall foul of IR35 if you are, in all but name, still an employee of existing business.

There are various things contractors do which make them less like employees, including but not limited to having multiple clients, doing the work at a time of their choosing not the client’s choosing, having the right of personnel substitution (eg a junior to do the work if said junior has the skill for that work ), being paid for the job (eg a VAT return costs £x) and not by the hour, using their own equipment (laptop etc) not that of the client.

Ok, thank you guys, that gives me something to think about.

@SheilaFentiman we are both directors, so if he draws a dividend,so do I. I also have a full time job currently, which I am hoping to resign from as soon as I decide what I'm doing. I will never be his employee, we will kill each other😂

@Kipperandarthur Thank you, that helps.

I think I am going to take the plunge, just worried that I'm going to fail

@Fatcat12345 so for every £7k dividend he gets, you get £3k dividend at present?

@SheilaFentiman that is correct

You can do this however your partner will be receiving a tax break on his corporation tax for having you on the payroll (I’m a business owner and have my husband on the payroll) so you may want to check with the accountant if it will actually save money

of course though if you’re setting up your own business regardless then go for it