Anti phoenixing rules - new contract outiside IR35

[jamesbrown]

They're agreeing the second distribution would've got a tax advantage had they treated it as CGT, it did breach the TAAR, so it shouldn't get the CGT tax advantage, hence voluntarily treating as dividends.

I don't see this adding any risk to the treatment of the first distribution (which was >2 years so doesn't breach the TAAR).

I agree that this isn't about the formalities surrounding dividend distributions. At the same time, the "quacks like a duck" argument could point to HMRC taking a different view about the arrangements as a whole. The reason Condition C was drawn so incredibly broadly is that it was designed to prevent all manner of shenanigans in relation to rebadging essentially the same enterprise.

Either way, it shows the lack of foresight by the OP and many others like them. It was always a terrible idea to MVL your company in response to changes in IR35 legislation alone, as many here warned at the time.

[Fred Bloggs]

I agree that this isn't about the formalities surrounding dividend distributions. At the same time, the "quacks like a duck" argument could point to HMRC taking a different view about the arrangements as a whole. The reason Condition C was drawn so incredibly broadly is that it was designed to prevent all manner of shenanigans in relation to rebadging essentially the same enterprise.

Either way, it shows the lack of foresight by the OP and many others like them. It was always a terrible idea to MVL your company in response to changes in IR35 legislation alone, as many here warned at the time.

Exactly. I often wonder if the chancellor ever considered a cretin tax? It would raise billions.

[jamesbrown]

[northernladuk]

Exactly. I often wonder if the chancellor ever considered a cretin tax? It would raise billions.

PC would find that highly unfair.

[passerby]

Thanks all for all your help, it looks like I will be with an umbrella for a little while then.

Not very pleased with all the criticism, cretin tax, lack of foresight..., You know nothing about my circumstances. We are all here to learn, help each other and avoid breaking the Law. Closing the company was a reasonable thing to do as it costs money to keep it live. A couple of years ago, when I went to work in Asia, I made it dormant for 4 years and reopened it when back in the UK.

But I will be fine either way, I have enough savings and I will just make big pension contributions and wait for the 2 years. Or convince my wife to move a tax free location and save 50% tax.

[eek]

Closing the company was a reasonable thing to do as it costs money to keep it live.

£13 to Companies house isn't exactly a lot and my dormant company accounts take about an hour to do.

[Lance]

Not very pleased with all the criticism, cretin tax, lack of foresight..., You know nothing about my circumstances. We are all here to learn,

Not really. You have fiduciary responsibilities.

It's like saying that it's not your fault you didn't know that your child needs food, and you are just learning, when you're in court for manslaughter. Slightly extreme comparison, but it aligns well.

[jamesbrown]

These forums show that many are indeed here to learn about their basic responsibilities - it's a hard lesson, though

As to the OP, we probably were a bit rude, but the lesson here for others is that you should treat an MVL a bit more seriously (as many of us were warning in the run up to April 2021).

[northernladuk]

Not very pleased with all the criticism, cretin tax, lack of foresight....

Unfortunately you may have been an innocent bystander that's got caught in the tide of this happening. As soon as the changes were announced we had a load of people coming to MVL. They were told a contracting career/business is more than the next contract and that things might change. We also joked about a tide of people coming back in 6 months asking this exact question, and we weren't wrong.

In general the people that shut up shop at the first inside gig were clueless about contracting it they were the very people that have (arguably) brought all this down on us. It just happened this change in circumstance brought them all running out from whatever rock they were living and in the glare of the forum. So many people had very little sympathy for them or their situation and were a little frustrated to say the least. Now we are where we said we would be that sympathy has all but dried up so when asking for help to get out a situation they shouldn't be in people get a bit an ear bashing for it.

So sorry if this isn't you but you can see where we are coming from.

[passerby]

£13 to Companies house isn't exactly a lot and my dormant company accounts take about an hour to do.

Correct me if I am wrong, but to make it dormant i had to empty the bank accounts. My company was cash rich and I had director loans as well. I would have had to pay all the accumulated cash as dividend or salary before making it dormant.