Advice for returning to contracting

[WordIsBond]

I gratefully accept the idiot of the day award.

Unnecessarily restrictive.

[WordIsBond]

Bad idea to change shareholdings twice in a year, could draw attention. Not illegal as such but could fall under aggressive avoidance. I wouldn't recommend that. But what some of these guys are overlooking is this:

I made my company dormant with about 80k in the business account.

combined with this:

4. I can put 40k into my SIPP (like i did before)

That makes it a very small problem.

1. Make the company active again.
2. Pay yourself the minimal salary but no divs for as long as you can afford it.
3. Then decide.

If Mrs still doesn't have a job, make her a 50% shareholder and pay equal divs to both of you. Keep the divs as low as you can afford for most of the year so you don't put her into higher rate if she gets a good job, but presumably by sometime in the autumn, at the latest, you won't need to worry about that for this tax year.

If she does get a job, give her a 5% share, pay her £2K in divs and you £38K. That takes advantage of the div allowance for her and keeps you in basic rate.

When you get down to about £40K, if the share structure isn't right for you anymore, don't change it. Just dump the rest into your SIPP, close the company, open a new one with the right share structure, and carry on. Obviously, if the share structure is still fine (say, Mrs has 50% and isn't employed, or Mrs has 5% and is employed), just carry on.

But your reserve isn't big enough to make it an issue to close the company, especially if you are willing to dump half of it to a pension. That means you've only got £40K to extract.

This advice may be wrong if Mrs is a bank executive who will earn £40K a month.

[TheDogsNads]

If he's furloughed, intending contracting to April 2021, has a dormant company with 80 odd grand in it, bothered about IR35 issues and is going to mess around giving his wife shares then take them off her etc, why not just simplify things and just draw day to day money needs from the company?

[GhostofTarbera]

Why bother with a sipp also when covid19 will kill most pensioners anyhoo


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