Limited company status - post IR 35

[suresh505]

I work as an IT contractor through a limited company with myself and my wife as directors. My wife performs the role of a company secretary and draws a small salary.

Once private sector IR 35 rules come into force, I will almost certainly start working with an umbrella company. I would still like to keep my limited company alive - one of the reasons is that if I get a contract with a smallish business, I might me able to work outside IR 35.

My question is this: If I continue to have my limited company running, will it be okay for my wife to withdraw salary from it as a company secretary?

[malvolio]

Yes - if it can afford it, and providing the income is commensurate with the effort spent (unless you're an MP of course...).

Of course you could always focus on doing work that places you outside IR35 and continue as normal. It's not all that hard

[northernladuk]

Yes - if it can afford it, and providing the income is commensurate with the effort spent (unless you're an MP of course...).

So that's a no then because there won't 10k of work to do surely?

[MrButton]

IR35 rules are currently in force in the private sector. Since around 1999?

From your post it seems the kind of work you do is inside IR35 so I seriously suggest you assess your position prior to the IR35 reform.

[suresh505]

Thanks for the clarification.

Of course you could always focus on doing work that places you outside IR35 and continue as normal. It's not all that hard

I'm not sure it is that easy given that there are only a small number of companies that have revenues less than £5 million.

[MrButton]

Thanks for the clarification.



I'm not sure it is that easy given that there are only a small number of companies that have revenues less than £5 million.

Eh? I think you need to go away and understand current IR35 rules. Then look into the IR35 reform stuff.

[simes]

Thanks for the clarification.

I'm not sure it is that easy given that there are only a small number of companies that have revenues less than £5 million.

Sir, I believe you need to understand the current thrust and the to-be thrust of IR35 in the Private Sector. To wit, now and post April 2020, one can still be inside IR35 in a company with less than £5m revenues. And, post April, it Will be possible to be outside IR35 in the Private Sector in companies with greater than £5m revenues...

To be sure there will be some understandings and educating to be performed.

[suresh505]

And, post April, it Will be possible to be outside IR35 in the Private Sector in companies with greater than £5m revenues...

Could you explain how this is going to be possible?

[DaveB]

Could you explain how this is going to be possible?

Not all roles will be automatically inside IR35, despite the potential changes being pushed through. The onus will be on the engager to determine the status and justify it one way or another. They will then be liable for the tax collected or otherwise.

The same criteria will apply: Supervision, Direction and Control and Right of Substitution. If your contract properly addresses these then the role should still be outside IR35.

There are still large numbers of roles in the public sector that are outside of IR35, despite the "reforms" pushed through last year, because the contracts are sound and the engager has agreed that they are outside.

[suresh505]

Thanks DaveB.

I still think it is going to be a very small percentage of the total workforce that will continue to work outside IR 35. It would be nice if we have any data on the proportion of contractors in public sector that still work outside IR 35.