Anti phoenixing rules - new contract outiside IR35

[Maslins]

A general comment - yes, there will be some people who MVL'd, then a couple of months later were offered an outside IR35 contract, and might have regretted their decision.

...but there's also plenty who didn't MVL and left their company ticking over. Some of those:
- will have then gone 2+ years without an outside IR35 contract,
- or worse, are now caught up in the MSC debacle.
They may well be cursing themselves for not having done an MVL a couple of years back.

Even those who did MVL then a year later wanted to contract again, they have choices:
- If they made big tax savings with the MVL (ie huge war chest, annual earnings modest), then they umbrella for a while, still better off overall.
- If they made small tax savings with the MVL (ie small war chest, annual earnings high), then they can use a company again, accepting dividend hit on liquidation distributions. Net downside is the cost of the liquidation was wasted money.
Still perhaps also marginal benefits of restarting with a clean slate, eg from MSC/IR35 perspective, even where they lost most/all of the personal tax benefits.

None of us reliably know what the future holds...you've gotta make the best of the situations that arise!

[cojak]

A general comment - yes, there will be some people who MVL'd, then a couple of months later were offered an outside IR35 contract, and might have regretted their decision.

...but there's also plenty who didn't MVL and left their company ticking over. Some of those:
- will have then gone 2+ years without an outside IR35 contract,
- or worse, are now caught up in the MSC debacle.
They may well be cursing themselves for not having done an MVL a couple of years back.

Even those who did MVL then a year later wanted to contract again, they have choices:
- If they made big tax savings with the MVL (ie huge war chest, annual earnings modest), then they umbrella for a while, still better off overall.
- If they made small tax savings with the MVL (ie small war chest, annual earnings high), then they can use a company again, accepting dividend hit on liquidation distributions. Net downside is the cost of the liquidation was wasted money.
Still perhaps also marginal benefits of restarting with a clean slate, eg from MSC/IR35 perspective, even where they lost most/all of the personal tax benefits.

None of us reliably know what the future holds...you've gotta make the best of the situations that arise!

And here, ladies and gents, is the answer to 80% of the posts on the board.

Post of the month right here...

[Chart Accountancy]

Hi,

I closed my ltd which I have used for like 10y and received the last distribution in June 2022. I closed it because i thought i would never need it again. I never thought I would get a role outside IR35.

Well, I managed to secure a role outside IR35, it will be a 100% remote job for a foreign bank.

I spoke to 2 accountants. The first one said I will be caught by the TARR rules. The second one said i will be fine, since the reason i closed my company was because it was not needed as no contract outside IR35 was expected. He said there is a small risk that HMRC will ask questions but he would help me draft a letter explaining the situation.

anyone went through this?

The Targeted Anti-Abuse Rule (TAAR) introduced in order to combat 'phoenixing' (the practice of closing one company and starting a new one immediately) only applies to distributions made on winding up (liquidation). It does not apply on striking off.

[jamesbrown]

The Targeted Anti-Abuse Rule (TAAR) introduced in order to combat 'phoenixing' (the practice of closing one company and starting a new one immediately) only applies to distributions made on winding up (liquidation). It does not apply on striking off.

They liquidated via MVL. I think this is implicit in the OP. In any case, it was confirmed later.