Confused Person Looking for Advice about Limited Company and IR35

[26hope]

Recently, I have been informed by my agency that I could be operating within IR35 and may run the risk of HMRC investigation come this April. Obviously, I am extremely worried because I believed all these years I have been compliant with HMRC.

I have a limited company for a number of years now. My accountant does all the paperwork and I pay all my taxes etc on time. I have asked my accountants for guidance but their response is limited. They say it would be a conflict of interest to advice me on what I need to do and I need to do my own research.

My agency has said that I should wind up my limited company and transfer to an umbrella company before April to avoid being at risk of investigation by HMRC. My agency is also pushing me to join this specific umbrella company and I am wondering – why now. Why have my agency not brought this to mattter to my attention before now when I have been with them for 5 years.

What I would like to know:

• Is whether what my agency says is correct?
• Could I make my limited company dormant (as I plan to use it again).
• And are there any legal issues involved in making a company dormant?
• Would it be legal to have a dormant company while I am having my salary paid by an umbrella company?
• And what would happen to my business bank account – could I still use it?

My other query: Can anyone recommend a good reputable umbrella company that is HMRC compliant, does all your taxes and NI. Pays you on time, easy to contact and has no hidden fees (i.e. fees for joining or leaving their service before a certain time period)?

Thank you for your help.

Yours Confused.

[cojak]

Confused Person Looking for Advice about Limited Company and IR35

'Your' agency is talking out of it's backside.

If an agency told me that I'd tell them to stick their contract where the sun don't shine.

They've probably just hooked up with this umbrella. They want scare you into going with their preferred umbrella, giving them a big slice of commission and possibly getting you into bigger trouble if it's a dodgy >83% take home ones.

[Batcher]

My agency has said that I should wind up my limited company and transfer to an umbrella company before April to avoid being at risk of investigation by HMRC.

Winding up the company won't stop an HMRC investigation. They will come after you if that's what they decide to do.

[Qdos Contractor]

'Your' agency is talking out of it's backside.

If an agency told me that I'd tell them to stick their contract where the sun don't shine.

They've probably just hooked up with this umbrella. They want scare you into going with their preferred umbrella, giving them a big slice of commission and possibly getting you into bigger trouble if it's a dodgy >83% take home ones.

This.

The agency won't have a clue about your IR35 status, which largely revolves around the relationship between you and your end client. Smells very fishy.

[Zero Liability]

Winding up the company won't stop an HMRC investigation. They will come after you if that's what they decide to do.

If it ends up being struck off, it can make it significantly harder, however.

[Alan @ BroomeAffinity]

Why does your accountant see a conflict in advising you?

[xoggoth]

Winding up the company won't stop an HMRC investigation

They would be obliged to reopen the company. Don't rely on my senile memory but recall reading that's pretty rare. However, that is rather an academic point as they have 3 months to look into the company's affairs while it is being wound up and could challenge the closure if they have concerns.

[Zero Liability]

They would be obliged to reopen the company. Don't rely on my senile memory but recall reading that's pretty rare. However, that is rather an academic point as they have 3 months to look into the company's affairs while it is being wound up and could challenge the closure if they have concerns.

Yeah, I think if they already have targeted it before closure, that would be the principal issue.

[PerfectStorm]

Umbrella doesn't make a difference to your IR35 status, you just lose money for the privilege

[ASB]

If the company bank account is used the company isnt dormant. Accounts etc will be required.

if you are within ir35 - and you give no details of your working prqctices- then it does not preclude your co.

it affects how you pay yourself. It hass marginally more effective but for a lot not worth the hassle.

there are othrr mitigation strategies which may be appropriate. Eg a thumping great pension contribution.