Married Couple - 2 companies, same address

[Robwg]

While you may save on Flat Rate - have you considered doing a joint firm for IR35 purposes? I would have thought a husband and wife team doing the same thing would have an excellent case for avoiding IR35 - particularly if either of you did a bit of substitution for the other?

I know I am planning on attempting a similar thing with my missus.

[xoggoth]

This covers CT:-

http://www.bytestart.co.uk/content/t...ompanies.shtml

However this really only made a difference when the 0% rate on 10k applied, now it's flat I can't see it makes any difference. Can't see it would affect the VAT flat rate scheme either, never used it but isn't it just based on turnover? 1 company at £100k or 2 at £50k, what's the difference?

[WindyAnna]

While you may save on Flat Rate - have you considered doing a joint firm for IR35 purposes? I would have thought a husband and wife team doing the same thing would have an excellent case for avoiding IR35 - particularly if either of you did a bit of substitution for the other?

I know I am planning on attempting a similar thing with my missus.

ISn't it the contracts that the company signs that matter rather than the fact that there are two of us?

[WindyAnna]

This covers CT:-

http://www.bytestart.co.uk/content/t...ompanies.shtml

However this really only made a difference when the 0% rate on 10k applied, now it's flat I can't see it makes any difference. Can't see it would affect the VAT flat rate scheme either, never used it but isn't it just based on turnover? 1 company at £100k or 2 at £50k, what's the difference?

Cheers for that - reason FRV is an issue is because it only applies to companies with a turnover of less than 150K - by being together we would blow that easily but separately Mr WA comes in a bit under that and so do I just about. It is more the hassle than anything else as well as the slight benefit!

Windy

[Alan @ BroomeAffinity]

ISn't it the contracts that the company signs that matter rather than the fact that there are two of us?

Yep, but I think what Robwg was trying to say is that it may be easier to satisfy a Right of Substitution if there is someone within the company to substitute. He may well be right, but the subsititute would not necessarily have to come from the same company - a subcontractor would work as well IMHO.

[WindyAnna]

Yep, but I think what Robwg was trying to say is that it may be easier to satisfy a Right of Substitution if there is someone within the company to substitute. He may well be right, but the subsititute would not necessarily have to come from the same company - a subcontractor would work as well IMHO.

Indeedy

[DonaldG]

Two separate points here - regarding VAT and Corporation Tax.

First the more straightforward one CT - husband and wife both owning different companies are "associated" companies. This basically means the limit for the higher rate of corporation tax is halved from £300K to £150K for each company. Therefore if either company makes more than £150K then you are taxed on some of this at the higher rate of corporation tax at 28% (the calculation uses the marginal rate).

The second point on VAT is not so clear - you would have to prove that you are commercially separate businesses eg independence, separate contracts etc to get separate VAT numbers. The VATman may argue that for all intents and purposes you are really one company - the only real downside is that you wouldn't be able to register for FRS - i would suggest that you speak to your accountant regarding this.

A combined company wouldn't really help on IR35 as each contract is viewed independently.