Cooperative working?

[floehopper]

I and a number of other independent developers (each currently with our own limited company) are contemplating working exclusively & cooperatively together for 6 months on multiple projects and for multiple clients. Does anyone have any thoughts about the simplest way this might work and whether it would inevitably fall foul of IR35? We'd want to split the total income equally between the individual developers.

[Steven@Parasol]

I and a number of other independent developers (each currently with our own limited company) are contemplating working exclusively & cooperatively together for 6 months on multiple projects and for multiple clients. Does anyone have any thoughts about the simplest way this might work and whether it would inevitably fall foul of IR35? We'd want to split the total income equally between the individual developers.

The easiest way would be for each person to invoice via their own Ltd company – thereby utilising the structures currently in place. If this did not work for the client who may simply want one invoice, a new company could be created with several different classes of shares or a partnership could be formed. This would also avoid IR35 but would mean no dividends could be paid.

A number of options are available but specific advice will need to be taken.

[Stag Cozier]

You could each have your own limited company where you subcontract your time to the a main company which contracts with the client. If the contracts are drawn up with the main company and the client not specifying a particular person is required to do the work but anyone can do it, then IR35 will not apply.

You can all be shareholders of the main company but the way you would receive your own slice of the pie is through subcontracting invoices. That way, it then gives you all the control of how you want to extract the money from your own co.

[northernladuk]

Floe, do you mind us asking why you are doing this? What is the reasoning and what are you hoping to get from it?

Do you have a result in mind or are you trying to cover something up?
Are you Uk citizens or working on visas?

Do you trust your colleagues enough to do something like this and if one person decides he is out are you prepared for the hassle?

All sounds a bit more hassle than it is worth to me but normally I am wrong.

*Update*

Just had a look at your posting history and threads you started like 'Starting work without a contract' and 'Personal Bank account' amongst others worry me greatly. I am wondering if there isn't a severe lack of understanding of what you are doing around the basics. These were 6 months ago but still.. With this lack of understanding do you really want to be dipping your toes in to a complicated cooperative or are you trying to do it so you can avoid the complexities of running the limited?

[floehopper]

Re: Cooperative working?

Floe, do you mind us asking why you are doing this? What is the reasoning and what are you hoping to get from it?

I want to work closely with a team of great software developers. We have worked together for a while with a much looser cooperative arrangement, but now we want to try focussing on building up a collective brand identity.

Do you have a result in mind or are you trying to cover something up?

The result I want is as I described above and as I described in my original question. I'm not trying to cover something up or trying to avoid paying tax. If the simplest way for us to do what we want means that we all need to become employees of a single company being paid a salary through PAYE, then that's fine. I was just wondering whether that's our only option.

Are you Uk citizens or working on visas?

We are all UK citizens.

Do you trust your colleagues enough to do something like this and if one person decides he is out are you prepared for the hassle?

Yes. And yes.

All sounds a bit more hassle than it is worth to me but normally I am wrong.

Is there something specific that you think will be "hassle" or are you just talking about the practicalities of working with other people?

*Update*

Just had a look at your posting history and threads you started like 'Starting work without a contract' and 'Personal Bank account' amongst others worry me greatly. I am wondering if there isn't a severe lack of understanding of what you are doing around the basics. These were 6 months ago but still.. With this lack of understanding do you really want to be dipping your toes in to a complicated cooperative or are you trying to do it so you can avoid the complexities of running the limited?

As with this post, my previous posts were attempts at avoiding writing *leading* questions. In each case I knew what I *thought* the answer was, but I was seeking an unbiased second opinion.