2 Limited companies

[stealer]

Originally Posted by stealer

This is kind of what I thought, in terms of IR35, it would look like "my" company has 2 clients. Which surely is better? GF is paid a salary as a normal employee but also gets dividends when they're paid out. Or would this slap her right inside IR35?

Or, is it better to not allow GF to be a shareholder? She'll be inside of IR35 anyway by being an employee, so If I take all the dividend money it might make more sense. Goes into a joint bank account anyway.

[Just1morethen]

Dividends need to be paid in accordance with things would get messy if you had 70% of the earnings but held 50% of the shares. How would you deal with that eventuality?

As far as IR35 is concerned, this process is largely irrelevant. As has been posted many times before IR35 is concerned with the working relationship behind a particular contract.

Have you considered the implications on VFRS? Two incomes could take you over £150K quite easily and then you'd have to come out of the flat rate scheme.

What happens to the assets of the company if (heaven forfend!) you and the GF split up?

In summary, its OK to do but I wouldn't receommend it.

[stealer]

Originally Posted by Just1morethen

Dividends need to be paid in accordance with things would get messy if you had 70% of the earnings but held 50% of the shares. How would you deal with that eventuality?

As far as IR35 is concerned, this process is largely irrelevant. As has been posted many times before IR35 is concerned with the working relationship behind a particular contract.

Have you considered the implications on VFRS? Two incomes could take you over £150K quite easily and then you'd have to come out of the flat rate scheme.

What happens to the assets of the company if (heaven forfend!) you and the GF split up?

In summary, its OK to do but I wouldn't receommend it.

Dividends aren't really an issue, all dividends we take just go into a joint savings account anyway, I was simply looking for the most cost effective way of paying them. We would be over the limit for FRS but don't really see that as a huge issue.

I guess, further down the line, if anyone in this situation were likely to split, you'd deal with it the same way any partnership does, be that professional or personal. There's always joint possessions, property, houses etc in a relationship.