Second Company - IR35?

[Mitch]

Hi all, am trying to answer a specific IR35 question. I have a limited company through which I contract to the public sector (I am covered with this company for IR35, as much as anyone can be!)

I am about to start up a second company in partnership with some ex-colleagues which will, initially, carry out web-based activities, including managing an advice service. The generated income will be insignificant to start with.

My question is... will running more than one company assist with IR35 points? I can find no guidance on HMRC or other advice sites, so thought I'd ask people who might actually know

Many thanks for your time.

[Craig at Nixon Williams]

IR35 is assessed on a contract-by-contract basis. The fact that you may be doing some working for a second company is irrelevant.

Probably not the answer that you wanted to hear...but I hope it helps!
Craig

[jamesbrown]

No. IR35 is a liability to your (specific) company on a specific contract.

[Mitch]

Damn!

Yep, not the answer I wanted but at least I have an answer!

Very grateful for your time.

[TestMangler]

So now that you've had some answers you didn't like, here is an addendum that you might.

Despite the supposed 'contract by contract' nature of IR35 investigations, there is the over riding question of 'being in business'. Having another company of which you are a director will lend a very small amount in your favour.

Before any of the CUK legal opinion givers shout me down, if you're going to shout me down, provide evidence rather than opinion, and I'll happily do the same. By evidence, I don't mean quote the HMRC website, I mean case evidence.

[jamesbrown]

So now that you've had some answers you didn't like, here is an addendum that you might.

Despite the supposed 'contract by contract' nature of IR35 investigations, there is the over riding question of 'being in business'. Having another company of which you are a director will lend a very small amount in your favour.

Before any of the CUK legal opinion givers shout me down, if you're going to shout me down, provide evidence rather than opinion, and I'll happily do the same. By evidence, I don't mean quote the HMRC website, I mean case evidence.

I'd just point out that being in business on your own account would be a secondary factor (beyond the case law on D&C, RoS and MoO and other secondary factors) in the context of the company that has the contract, since that is where the IR35 liability rests. Legally speaking, I don't see how this (secondary) pointer could extend to some other company with which the contractor has an interest. I have shares in Barclays for example

[GazCol]

I'd just point out that being in business on your own account would be a secondary factor (beyond the case law on D&C, RoS and MoO and other secondary factors) in the context of the company that has the contract, since that is where the IR35 liability rests. Legally speaking, I don't see how this (secondary) pointer could extend to some other company with which the contractor has an interest. I have shares in Barclays for example

Indeed - being a director of another company has no bearing on IR35 or the HMRC's BET.

[TestMangler]

I'd just point out that being in business on your own account would be a secondary factor (beyond the case law on D&C, RoS and MoO and other secondary factors) in the context of the company that has the contract, since that is where the IR35 liability rests. Legally speaking, I don't see how this (secondary) pointer could extend to some other company with which the contractor has an interest. I have shares in Barclays for example

And the Barclays example is one of the dumbest things I've ever seen posted on here. And I read SY01's posts !

Most of what you are saying is basically correct, but lots of secondary factors are taken into account. Have you ever seen a list of questions posted to a client during an IR35 enquiry ? Badge colour, parking spaces, canteen prices. I could go on.

When a case is decided on balance of probability, all factors are important, however minor. Establishing the general business behaviour of the contractor can (and does) carry some weight.

[TestMangler]

Indeed - being a director of another company has no bearing on IR35 or the HMRC's BET.

Case evidence for this claim ??

[GazCol]

Case evidence for this claim ??

That's a bit of a double negative really isn't it? IR35 cases are decided on a contract basis and the question of "Do you happen to be a director of another limited company" doesn't appear on the BET.