2 year rule to start LTD up issue

**WTFH** · 21 September 2022, 16:08

Originally posted by RajaStyle View Post

Hi All

Just looking for some advice

I stopped trading July 2020 and closed company down (as at the time I believed everything would be ir35 etc)
Accountant dragged their feet in doing final accounts and didn't complete until Jan 2021 and engaged MVL
(with a refund in corp tax due from HMRC had to wait for refund with covid delays)
I then chased HMRC for refund so company could be closed which I got in August 2021
MVL started their process in September 2021 and instructed me to take money out etc
They completed their process and filed everything March 2022

I tried to setup again thinking that 2 years would be from end of trading from last company i.e. August 2022 but been told I can't until March 2024 - 2 years from MVL end process, same trade etc. This is crazy ?

I was the only director and Mrs was down as company sec

I wnet inside ir35 but really need to setup again as may be landing outside ir35 role , anything I can do without having to pay taxes on all the 70k that got released from last company? As that would be disastrous after all this.

I'm not looking to go against the law but would it be reasonable to start up again showing a clear 2 years of non trading ? Would HMRC look favourably on this ?

Could I setup with Mrs as director and me as company sec ? would that be seen unfavourable and / or agencies won't be happy as I am not director ?

FYI - I did try and stop the MVL process for this reason but was told once started can't stop has to play out and close.

I'm not looking for anyone to make smart comments but would really appreciate thoughts on the best way forward.

Many Thanks in Advance

You're going to have to use an umbrella until March 2024.
Stopping trading is not the same as closing a company. MVL is the trigger.

**eek** · 21 September 2022, 17:07

It's 2 years after the distribution for each payment

So if the majority of that £70k was taken out in September 2021 it's September 2023 and the rest is April 2024.

Beyond that you only hope would be a decent justification for a change in circumstances but an outside IR35 contract definitely isn't enough.

**northernladuk** · 21 September 2022, 19:18

I'm not looking to go against the law but would it be reasonable to start up again showing a clear 2 years of non trading ? Would HMRC look favourably on this ?

So you don't want to go against the law but because it doesn't suit you you are asking if it's OK to go against the law? You've said yourself it's not 2 years from non trading so what do you want us to say? You've answered your own question very eloquently

Will they look favourably on it? No it's against the law.

Could I setup with Mrs as director and me as company sec ? would that be seen unfavourable and / or agencies won't be happy as I am not director ?

Nope won't work because that's about as transparent as a tax dodge can get. Also agencies won't deal with you if you aren't the main shareholder so won't be able to get contracts.

It was a bad mistake from the off and many people did it so you aren't alone. We've already had quite a few people in your situation and there are going to be many many more out there, a good majority of people that MVL'd around that time I reckon. HMRC put the rule in for exactly this I am afraid and it's gonna stick in instances such as this.

No good news for you here I am afaid

**Lance** · 22 September 2022, 08:47

Originally posted by northernladuk View Post

No good news for you here I am afaid

There's loads of good news. OP paid considerably less tax then he otherwise would have done.
It's not a lose-lose. It's a win.
It's just a win with some limitations for the next 18 months.

**northernladuk** · 22 September 2022, 09:14

Originally posted by Lance View Post

There's loads of good news. OP paid considerably less tax then he otherwise would have done.
It's not a lose-lose. It's a win.
It's just a win with some limitations for the next 18 months.

I like the cut of your jib sir

**RajaStyle** · 22 September 2022, 10:29

Thanks all for the clarity, much appreciated.

If the role is outside IR35 I'm assuming I can still take it but use an umbrella?

**eek** · 22 September 2022, 11:03

Originally posted by RajaStyle View Post

Thanks all for the clarity, much appreciated.

If the role is outside IR35 I'm assuming I can still take it but use an umbrella?

Yep - just speak to Lucy at Clarity as you'll have the choice of any umbrella and throw as much as you can into your pension pot.

**northernladuk** · 22 September 2022, 14:48

Originally posted by RajaStyle View Post

Thanks all for the clarity, much appreciated.

If the role is outside IR35 I'm assuming I can still take it but use an umbrella?

I don't wish to be rude but...

Some of your posts show a pretty fundamental lack of understanding about contracting. The fact you thought the new legislation was going to push everything inside so shut your company at the first hint and that you then didn't understand MVL properly. Then there is the question whether you can run an outside gig through a brolly, the redundancy question and so on.

It looks like you are just guessing or 'playing at being a contractor' and making fundamental mistakes. Granted it's easy to say in hindsight but I'm just wondering if you put some more focus in to running your business and understanding all the nuances around it would have helped you in most of the questions you've asked. Understand what you do, who you do it for, how you get paid and all that would help you in the long run rather than bouncing from issue to issue. Understandable if you were new to contracting but looking at your history you've been at it quite awhile and have used accountants and umbrellas and maybe not understood it all properly.

As I say, not trying to be rude but working on the bigger picture rather than picking up the pieces might serve you better in the future?

**ensignia** · 22 September 2022, 15:05

We don't want your sort back. Private sector IR35 regs came in, and it really showed the true mentality of most "contractors", and that the Govt was right to do so.

2 year rule to start LTD up issue