Ltd Company Inside IR35

[Cameron1590]

Hi All,
I am looking for some advice on forming a Ltd Company while caught by IR35.

My main aspiration here is to be able to record my income via my own Ltd company so that in the future it should hopefully make it easier for me to bid for any relevant tenders as a trading Ltd company.

I have read online that it is possible for your Umbrella firm to simply pay your Ltd Company account once they have taken all mandatory deductions, this allows you to file year end accounts for the Ltd Company that shows your trading activity for the year with all taxes having already been paid by the umbrella firm.

The advice I'm looking for really is, is this possible?

I've read online it is, but speaking to my umbrella firm they couldn't grasp why I wanted to do this and couldn't get their heads round this largely being a paper exercise to help with bidding on tenders in the future rather than me trying to gain financial from this setup.

Essentially the conversation was "there's no benefit financially to you doing this so what's the point and you will have already paid tax on your earnings so your just creating work for yourself" I don't think they could really grasp my future visions or where I was coming from.

Thanks

Cam

[jamesbrown]

It's possible, in principle but, honestly, both you and the supply chain above you would be absolutely nuts to consider this. Use an umbrella for now, making use of salary sacrifice to your pension, as much as possible. When you need a company, you can open one overnight, so speed is not really an argument.

[jamesbrown]

In other words, I am not remotely surprised at the reaction you got. That would be the reaction of any sane umbrella company.

[malvolio]

It's possible... but since its income will have been taxed and so will have to go into your personal account without touching the sides the company would be somewhat redundant. So in effect the company has no trading income which is no help for proving viability.

[northernladuk]

Essentially the conversation was "there's no benefit financially to you doing this so what's the point and you will have already paid tax on your earnings so your just creating work for yourself" I don't think they could really grasp my future visions or where I was coming from.

With good reason.

I think you are vastly overestimating the value of having a wage go through your company for bidding process. Any process worth it's salt is gonna see through that and even if it doesn't those values aren't going to make you look like a solid, viable supplier really are they.

[Lance]

your proposal only has downsides.

The perceived upside of having a trading company for longer is meaningless.
If you want a company with an earlier formation date, then just buy one off the shelf, but it's not going to cut any mustard with a potential client. They simply don't care.

And if they did care, basic due diligence will tell them the truth.