2 or 3 contractors working under same firm

[Robwg]

If you have 2 or 3 contractors (say a husband and wife team) both working as directors in one limited - how are these viewed from an IR35 point of view?

Or to put the question another way - when does a small group of contractors cease to become a small group of contractors and instead becomes a 'small consultancy'?

[tim123]

If you have 2 or 3 contractors (say a husband and wife team) both working as directors in one limited - how are these viewed from an IR35 point of view?

Or to put the question another way - when does a small group of contractors cease to become a small group of contractors and instead becomes a 'small consultancy'?

when there are 11 of you.

HTH

tim

[ChimpMaster]

when there are 11 of you.

HTH

tim

So are you saying that if 11 of you got together and formed a company, you wouldn't be under any possibility of IR35?

(ignoring all financial implications of how much each earns the company and then gets paid etc).

[Lockhouse]

To be honest why go to all that trouble. In reality for most of us IR35 is an optional tax anyway?

[Robwg]

To be honest why go to all that trouble. In reality for most of us IR35 is an optional tax anyway?

I am interested as I am thinking of doing it with my other half when she goes back from maternity - and also interested as from what I can see IR35 is an extremely woolie and bollocks piece of legislation and how it would handle this situation? (and whether I can relax a bit if I have two sources of income coming into the firm).

[Bluebird]

IR35 is all about whether you are seen to be a 'employee' by default of the way your contracted and the way you undertake working for the end client - it's got bollocks all to do with how many or how few people are in your company.

My thought would be that the more contractors that are in a company the higher the risk that one will fall foul of IR35, or the more likely you are to get an investigation.

But then thats just my opinion...

[ZZZZ Snoozer]

when there are 11 of you.

HTH

tim

Isn't it 21, so that each has < 5% of the shares?

[swamp]

The key is to form a Ltd with a friend with the same skill set, where one of you can substitute for the other.

If you supply a substitute on a contract then that contract is outside of IR35, regardless of any other factors.

[Robwg]

So what happens in a scenario where you have a contract which is (hypothetically speaking) within IR35 - however you also at evenings and weekends work on something that requires reinvesting that money into other areas of the business (say - web hosting or something and you need to spend the money you earned from the contract on hardware initially to get the business up and running).

How do they work all that out?

[tim123]

Isn't it 21, so that each has < 5% of the shares?

Yes you are right. I was mis-remembering the number.

tim