Anti Phoenixing Legislation

[jamesbrown]

That is correct - Condition C only arises as an issue in your case if you return to contracting again under a Ltd company within the 2 years (I'm not sure if it was ever clarified whether returning to contracting via an umbrella would count).

I don't think it was clarified, and it probably won't be without a test case (unlikely). On the one hand, it's employment, so the full PAYE taxes are being paid (i.e. there isn't much of an avoidance angle here, beyond the capital treatment). On the other hand, it's only nominally employment, and could be argued to be carrying on a similar "trade or activity". TBH, I think HMRC would be pushing their luck with this scenario, and they have much better cases to pursue, but I don't think it has been specifically excluded, unless someone knows differently...

[TheCyclingProgrammer]

I don't think it was clarified, and it probably won't be without a test case (unlikely). On the one hand, it's employment, so the full PAYE taxes are being paid (i.e. there isn't much of an avoidance angle here, beyond the capital treatment). On the other hand, it's only nominally employment, and could be argued to be carrying on a similar "trade or activity". TBH, I think HMRC would be pushing their luck with this scenario, and they have much better cases to pursue, but I don't think it has been specifically excluded, unless someone knows differently...

I think, if they've set out there stall with the statement "employment by an unconnected third-party is OK" then they've backed themselves into a corner as far as umbrella employment goes. Lets be honest, despite some control over what contracts you take on, being employed by an umbrella isn't that much of a leap by being employed by a consultancy.

You're right though, unless HMRC want to tackle that particular angle and there's a test case, who knows?

[jamesbrown]

I think, if they've set out there stall with the statement "employment by an unconnected third-party is OK" then they've backed themselves into a corner as far as umbrella employment goes. Lets be honest, despite some control over what contracts you take on, being employed by an umbrella isn't that much of a leap by being employed by a consultancy.

You're right though, unless HMRC want to tackle that particular angle and there's a test case, who knows?

Yep, I agree completely.

[handyandy]

Does anyone know when the 2 year clock starts ticking?

Is it from the date the LTD is dissolved, from the date it ceases actively trading, the date the last engagement with a client ended, r something else. I guess this would make a difference to the OP as there is 6-7 months from when he started a perm position and when the LTD was dissolved.

I wound up my last LTD back in 2011 after going perm and did the ERS distribution of retained profits to myself and partner (50/50 shareholders) without any problems. I'm still perm but expect I'll go back to contracting again in the next few years. Interesting to hear how they are tightening up.

[TheCyclingProgrammer]

Does anyone know when the 2 year clock starts ticking?

Is it from the date the LTD is dissolved, from the date it ceases actively trading, the date the last engagement with a client ended, r something else. I guess this would make a difference to the OP as there is 6-7 months from when he started a perm position and when the LTD was dissolved.

I wound up my last LTD back in 2011 after going perm and did the ERS distribution of retained profits to myself and partner (50/50 shareholders) without any problems. I'm still perm but expect I'll go back to contracting again in the next few years. Interesting to hear how they are tightening up.

Its 2 years starting from the date on which the distribution was made:
Finance Act 2016