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simontrl

13 karma · joined May 1, 2022

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simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
> You could retain ownership and rent it to your company. Sell it in return for debt, etc... For example maybe you sell your SaaS to the business for £20M then forever the company is repaying debt to you, instead of paying dividends.

This idea is very alien to me. Can you link to any concrete examples of this for something like a small solo SaaS company? How do I pick the price? Where is the purchase money coming from when I'm selling it to myself with a company that is starting from nothing? How do I decide between selling vs renting it? What stops this being abused to avoid tax?

simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
Thanks! I read the link but not sure how to apply it here, can anyone provide an example for my scenario above?

How do I get a safe evaluation of my solo SaaS? How does my new company buying the SaaS with money or shares work when the company is starting with zero money in it? How much can I look to save/make by doing this and what risk is there of HMRC disagreeing? Is it really stupid to transfer the SaaS without any 'sell' value?

This area seems like a really big deal to me and I can imagine some accountants not doing it correctly.

simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
Thanks, I was expecting a lot of "talk to an accountant" replies but you can't go into that blind imo because you need some base knowledge to ask the right questions and detect bad advice.
simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
Makes sense but I already have several years of experience using Freeagent by myself, and there's lots of accountants that advertise they use Freeagent too. If I don't need a specialist accountant, finding one that uses Freeagent seems a good idea and if it doesn't work out (you hear lots of horror stories) I can easily switch without the upheaval of learning new software.
simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
> You (based on your description) do not have an existing liability that you're looking to minimise

So I've not borrowed any money, or bought anything over the years for business use besides domain registration, email hosting, web hosting, laptop and phone. The SaaS does have value without me though so I think it's sellable if that's relevant.

simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
Can you recommend any packages here? I'm considering VAT registration too. I think for the sake for ~£1K/year that can be expensed, having an accountant deal with it and advise here is a no-brainer in terms of time saving and having it done right.
simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
The consultancy work is fairly low risk and would be covered by business insurance. Two Ltds would mean paying double the accountancy costs, getting two business current accounts, and a bit more personal admin? It doesn't seem worth it. If the SaaS started bringing in huge money I would likely stop consulting too.
simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
Any recommendations? The average I'm finding is more around £1300/year. Crunch is around £700 a year but I'd rather use Freeagent over their own software so I can switch accountant later if needed.
simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
> I dont think you will sell your software to the company.

Are there cases where a one-person Ltd should do something like this?

> There are also awkward laws around consultants who look like employees.

My consultancy projects tend to last 1 to 6 months, tend to be fixed price, I set my own hours, use my own equipment, set my own work plan and usually have more than one client so that seems very safe to me? I find people complaining about IR35 rules online but most of the time it really sounds like they basically are employees.

simontrl··on Ask HN: Moving consulting work and SaaS income from sole trader to UK Ltd?
> come from tax considerations: if you're not taking this action as an immediate tax minimisation strategy, you do not need to worry about things like goodwill valuations, selling your app to the company

Can you explain more why this doesn't apply to me here? One reason for me going Ltd is to minimise tax by keeping money in the company when I'm personally getting towards the higher tax bands.

Edit: When should you mind about finances being exposed? I'd rather people I know don't look it up but besides that, what does it matter?