L
Lyreco
Guest
Hi, I recently quit my job and am in the early stages of setting up a company to develop a business idea of mine.
I have a small but sufficient savings pot to live out of for 2-3 years and to help finance the new company so I have enough to go without an income for a reasonable ammount of time.
It's likely to take a year or two to get the new company off the ground so I will continue to consult with my former employer to supplement my income and expect to bring in up to approx. €40k a year while I do this. I'm considering how best to utilise this consulting income for investing in my new business.
If I go the self-employed route then anything I earn while consulting will be subject to income tax. Since I don't need the consulting income for living expenses I would like to explore the idea of setting up a limited company solely for my consulting income and using this income to invest in my new business or at least using this money in a more productive manner.
The savings would not be massive but potentially several thousand euro if I could reduce the tax paid on this income to corporate tax @ 12.5% (or no tax at all). My basic calculations are below and don't include any deductions that I might be ablel to make for expenses etc. as these will be fairly limited anyway.
I'm aware of issues with such a scheme as outlined in this thread:
https://www.askaboutmoney.com/threads/loans-from-one-company-to-another.117928/
I have a small but sufficient savings pot to live out of for 2-3 years and to help finance the new company so I have enough to go without an income for a reasonable ammount of time.
It's likely to take a year or two to get the new company off the ground so I will continue to consult with my former employer to supplement my income and expect to bring in up to approx. €40k a year while I do this. I'm considering how best to utilise this consulting income for investing in my new business.
If I go the self-employed route then anything I earn while consulting will be subject to income tax. Since I don't need the consulting income for living expenses I would like to explore the idea of setting up a limited company solely for my consulting income and using this income to invest in my new business or at least using this money in a more productive manner.
The savings would not be massive but potentially several thousand euro if I could reduce the tax paid on this income to corporate tax @ 12.5% (or no tax at all). My basic calculations are below and don't include any deductions that I might be ablel to make for expenses etc. as these will be fairly limited anyway.
I'm aware of issues with such a scheme as outlined in this thread:
https://www.askaboutmoney.com/threads/loans-from-one-company-to-another.117928/