Does anyone have any experience with this, my hairdresser has an accountant who said he cannot rent a chair from his own salon. He owns the salon with another hairdresser and this is under a limited company, they are directors 50/50.
Currently they draw a fixed salary per month, but due to differing workloads and time spent in the salon, they feel its unfair to take the same salary every month if they're not putting the hours in, so to speak.
He thought that if him and his partner continue with the limited company as normal, then instead of taking a salary out of the company, they also set up as sole traders and rent chairs off their own company, that way they will only be paid for the work they are doing etc. through their sole trader earnings. Obviously at the year end if there are reasonable profits which are surplus in the limited company they could take dividends.
Does anyone know if this is possible, I can't see any issue with it?
I said I'd ask if anyone could help.