Inside IR35 role through Holding co structure

[Fuzzynavel]

Hi All, I have a bit of a niche question for you to think about.

I have been a contractor for years through my own Ltd co which I am currently shutting down. The reason I am doing this is that I want to set up a new company within my holding company structure for contracting.

As I have been contracting for years I have been able to make some property investments and have developed a portfolio of properties within a Ltd company. This Ltd property co sits under a holding entity. As I also do development work I also have a development company which is VAT registered sitting under the holding co to allow me to move money and properties around relatively freely.

Now, my plan was to recreate my consulting business as a third company under the holding co so that I can use this business to provide liquidity to my property companies and use their losses to offset corp tax for the consulting business.

There is now a spanner in the works in that I am looking at a local Inside IR35 role as I need money....Outside roles are becoming fewer and further between so I need something to tide me over. I suspect that as I will be a deemed employee there will be no way to do the money movements that I had planned?
The only option I have available to me is to pile the majority of my earnings into my SSAS pension to lessen the Salary/Deemed payment taxation? any other ideas?


Thanks for any fun ideas in advance.

[jamesbrown]

You probably don't want any "fun" ideas.

The only sane idea is to push this through an umbrella. You're very unlikely to find a client or agent that will put an inside IR35 contract through YourCo and it makes very little sense to do so.

Anyway, yes, all inside IR35 payments are deemed employment payments, so there will be no residual cash whatsoever. Obviously, you're free to do what you want with existing profits.

Side note: the structure you're using is more complicated than the average contractor around here will be using or have considered, so I doubt you will get much input. Also, it makes less sense with the associated company rules for CT.

[Fuzzynavel]

It is a bit more complicated than the average contractor here but my accountant was on board with the idea when I was just doing Outside IR35 work.

Moving losses around inside a holding structure is not a new idea...I recently tried to buy a small portfolio that had £100k of losses which is what got me thinking about putting the Consulting business in there too.

Buying companies for their losses is not a new idea either but there are rules around keeping the structure for a certain number of years and not changing the purpose of the company...anyway I digress.

Looks like the pension will be getting pumped up rather than paying tax...I'd rather live on a small wage than give HMRC what they want (Tax revenue) by forcing us into Inside IR35 contracts.....I'll then lend some of the money to my other company and add to my portfolio....win/win.