Entrepreneurs relief - 2 years of trading

[Sandy100]

Hi everyone, sorry a newbie here! I've been contracting for almost two years and am looking to go perm. The HMRC rules say that the company has been trading for 2 years to claim ER, but how is trading defined? If the company is simply 'open' for two years does that qualify? If my contract dates are 1 Jan 2018 to 15 Dec 2019 (for example), and the company is closed a few weeks after (say 1 Jan 2020), is that a 2 year trading period? Thanks!

[northernladuk]

A couple of guides mention a rule of thumb about 20% of time not doing the main activity will be a problem. This guide for example.
https://www.tolley.co.uk/__data/asse...urs_relief.pdf

But the best person to ask would be your accountant no?

[Jess inniAccounts]

Hi everyone, sorry a newbie here! I've been contracting for almost two years and am looking to go perm. The HMRC rules say that the company has been trading for 2 years to claim ER, but how is trading defined? If the company is simply 'open' for two years does that qualify? If my contract dates are 1 Jan 2018 to 15 Dec 2019 (for example), and the company is closed a few weeks after (say 1 Jan 2020), is that a 2 year trading period? Thanks!

Hi Sandy

Your company must be actively trading for two years, as opposed to being open for two years.

[Old Greg]

Hi Sandy

Your company must be actively trading for two years, as opposed to being open for two years.

So find yourself a couple of days' work in the New Year somehow.