Anti phoenixing rules - new contract outiside IR35

[jamesbrown]

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.

A dormant company doesn't need to have zero assets, but it does need to be not trading and to have no other taxable income (e.g., interest).

[northernladuk]

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.

Google is your friend here.

Overview from Gov pages
https://www.gov.uk/dormant-company

And a million more articles on the details out there.

And ask your accountant. It's not something you want to be getting wrong.

[Lance]

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.

Google is your friend here.

Overview from Gov pages
https://www.gov.uk/dormant-company

And a million more articles on the details out there.

And ask your accountant. It's not something you want to be getting wrong.

oops.




That's a costly mistake. A complete failure of fiduciary responsibilities.
OP's shareholders should really consider whether to let OP run another company for them again. Lest OP make another mistake.

[northernladuk]

That's a costly mistake. A complete failure of fiduciary responsibilities.
OP's shareholders should really consider whether to let OP run another company for them again. Lest OP make another mistake.

Indeed. OP made a screw up so they should really have learned to start stepping up and not carry on asking someone else to fix their problems.

[passerby]

Really struggling to understand all the messages. Can someone point me where I screwed up? I am the only shareholder and I got all the money. I am using an umbrella at the moment and making significant pension contributions and doing really well.

Advice regarding the dormant company was made by my accountant, did not make it up. I had to empty all my accounts. Do you think a dormant company can earn interest on cash and pay bank fees?

I have 2 accountants at the moment. one used to manage my ltd co and the other does my tax returns. Both are tax adviser and gave me conflicting advice regarding phoenixing rules hence why i asked in this forum

[jamesbrown]

Can someone point me where I screwed up?

It's right there in the OP, isn't it? Like many others, you were shortsighted about what the changes to the IR35 rules meant or, rather, the consequences of liquidating.

Do you think a dormant company can earn interest on cash and pay bank fees?

No, neither.

Both are tax adviser

Well, I guess one of them isn't very good at tax advice.

As discussed (to death) above, you can open a new company in October 2023 at the earliest, else June 2024 if you don't want to pay the extra tax on the second distribution and/or risk closer scrutiny of what you've been doing.

[ensignia]

Can someone point me where I screwed up?

By being a mercenary permietractor.

But don't worry, you're in good company; 1000s of you suddenly appeared in April 2021. You'll just have to face the consequences and forget about being a contractor for a while.

[northernladuk]

Do you think a dormant company can earn interest on cash and pay bank fees?

And yet again, zero effort to find stuff out and relying on asking everyone questions because you don't understand. This is exactly why you are in the predicament you are in.

Copy that exact quote in to Google and you get your answer. You might actually learn something extra which will save us from your next daft question.

[passerby]

And yet again, zero effort to find stuff out and relying on asking everyone questions because you don't understand. This is exactly why you are in the predicament you are in.

Copy that exact quote in to Google and you get your answer. You might actually learn something extra which will save us from your next daft question.

I think you missed the context, it was a rhetorical question. I already asked my accountant and she told me.
That's one of the reasons i closed my company, I was investing the money and making thousands a year by trading bonds and trusts. keeping the company open was too costly. Switching the assets to cash and making the company dormant was not an option either as cash depreciates. hence my logical decision to close the company.

Paying myself a dividend and then making a company dormant would defeat the purpose.

Anyway we are getting away from the initial subject, thanks all for your help. Special thanks to Maslin for his informed and non judgmental response.

[WTFH]

I think you missed the context, it was a rhetorical question. I already asked my accountant and she told me.
That's one of the reasons i closed my company, I was investing the money and making thousands a year by trading bonds and trusts. keeping the company open was too costly. Switching the assets to cash and making the company dormant was not an option either as cash depreciates. hence my logical decision to close the company.

Paying myself a dividend and then making a company dormant would defeat the purpose.

Anyway we are getting away from the initial subject, thanks all for your help. Special thanks to Maslin for his informed and non judgmental response.

What was your company's SIC code?
If your company was an investment company and it was still being successful, then closing it sounds silly.
If your company was, e.g. an IT consultancy, but your company was "investing the money and making thousands a year", then you should probably have changed your SIC code when you stopped doing IT work through it.