Going Permie.. what to do

[SandyD]

So decided to try out this permie role after contracting for the last 10 years.

I believe many here have dipped into permie roles and came back contracting, so perhaps you can give me some advise.

I don't want to close my company down, just in case I really hate the permie role and come back into the contracting market. So it will be non-trading/dormant company.

I haven't told my accountant yet, I will do so soon, I still need him to sort out my company tax / personal tax, as well as submitting non trading company accounts in I stay on. But I don't want to pay the usual fees as if I am a contractor, so should I cancel my agreement with them and ask them to do a one off accounts for the above?

Re money left in the company, there has been other threads about withdrawing some of the cash, but as I will be getting a monthly salary from my permie role, I need to be careful how to take the money out and in which format.

Any advise?

[northernladuk]

Personally if I was in your situation I would close the company and start afresh when I get back to contracting. I don't think closing it takes it completely off the radar for invetigations but must surely put it lower down the list if it isn't trading. Put that episode behind you and then start again later. I run my books to the letter so nothing to worry about about but no point holding it open and inviting inspection when need be.

Make sure you check your contract with the accountant to see if you are paying for his service monthly or you are paying a yearly cost off in monthly payments. Could make a difference when it comes to signging off from him.

[Craig at Nixon Williams]

Personally if I was in your situation I would close the company and start afresh when I get back to contracting. I don't think closing it takes it completely off the radar for invetigations but must surely put it lower down the list if it isn't trading. Put that episode behind you and then start again later. I run my books to the letter so nothing to worry about about but no point holding it open and inviting inspection when need be.

Closing the company wouldn't make a HMRC enquiry impossible (they can technically open one for 6 years) but it does make it a fair bit harder for them as they would need to apply for the company to be restored etc. That wouldn't stop them looking at personal tax though!

If the company is closed down and you might start contracting again then it would be prudent to take the whole of the final distribution as a dividend so that no tax advantage is gained from capital treatment. This is because of the existence of transactions in securities rules which is essentially anti-avoidance legislation existing to stop you benefiting from such arrangements. These have never been tested in this context (as far as I am aware) so can’t really comment on exactly how (or if) HMRC would attempt to challenge it, but as it exists it should be considered.

With regard to the situation with the accountant, speak to them and see what they can do for you!

Craig

[Sausage Surprise]

So decided to try out this permie role after contracting for the last 10 years.

I believe many here have dipped into permie roles and came back contracting, so perhaps you can give me some advise.

I don't want to close my company down, just in case I really hate the permie role and come back into the contracting market. So it will be non-trading/dormant company.

I haven't told my accountant yet, I will do so soon, I still need him to sort out my company tax / personal tax, as well as submitting non trading company accounts in I stay on. But I don't want to pay the usual fees as if I am a contractor, so should I cancel my agreement with them and ask them to do a one off accounts for the above?

Re money left in the company, there has been other threads about withdrawing some of the cash, but as I will be getting a monthly salary from my permie role, I need to be careful how to take the money out and in which format.

Any advise?

The word is advice.

[Maslins]

Like NLUK said, I'd be inclined to close the company down.

If you keep it open, your accountant may reduce fees a little, but if you'll keep VAT and employer registrations open, there's still quite a few things to file. Also re the annual accounts/CT return, yes, if the company is dormant for a whole year, then these become much simpler, but only from the point that it's dormant for an entire year.

You can keep the company and deregister for VAT and as an employer, but to be honest it's almost as easy to close the whole thing down. You've then got the benefit of not incurring penalties if you forget to file a few nil returns of some kind, and can potentially get nice tax breaks on extracting funds via CGT.

If you returned to contracting, setting up a company can cost as little as £15, and registering as an employer/for VAT isn't that hard, especially when doing it for a second time.

[Craig at Nixon Williams]

Like NLUK said, I'd be inclined to close the company down.

If you keep it open, your accountant may reduce fees a little, but if you'll keep VAT and employer registrations open, there's still quite a few things to file. Also re the annual accounts/CT return, yes, if the company is dormant for a whole year, then these become much simpler, but only from the point that it's dormant for an entire year.

You can keep the company and deregister for VAT and as an employer, but to be honest it's almost as easy to close the whole thing down. You've then got the benefit of not incurring penalties if you forget to file a few nil returns of some kind, and can potentially get nice tax breaks on extracting funds via CGT.

If you returned to contracting, setting up a company can cost as little as £15, and registering as an employer/for VAT isn't that hard, especially when doing it for a second time.

If the OP is thinking of making a return to contracting, do you not think that Transactions in Securities should be considered when making a decision?

Craig

[yasockie]

Frankly it's not that much of a hassle to close a company down and the open another one but in my view having your company up and running for a number of years does count towards prestige - it does give clients and potential clients the confidence that you are a reliable business that is maybe less likely to just disappear.
I also take care to build a brand, which is obviously not a world-wide one like Coca-Cola, but in my niche people now know my company and my products which is great for business.
In my case I've also had to resort to permie roles, but they were short periods so it didn't make sense to wind down the company...

[TheFaQQer]

Closing the company wouldn't make a HMRC enquiry impossible (they can technically open one for 6 years) but it does make it a fair bit harder for them as they would need to apply for the company to be restored etc. That wouldn't stop them looking at personal tax though!

With that in mind, it may be worth ensuring that you continue your PCG membership (at the appropriate level) so that if there is an enquiry, you can seek their advice.

[FiveTimes]

With that in mind, it may be worth ensuring that you continue your PCG membership (at the appropriate level) so that if there is an enquiry, you can seek their advice.

So how long do you keep PCG membership after closing down a company ?

[northernladuk]

Frankly it's not that much of a hassle to close a company down and the open another one but in my view having your company up and running for a number of years does count towards prestige - it does give clients and potential clients the confidence that you are a reliable business that is maybe less likely to just disappear.
I also take care to build a brand, which is obviously not a world-wide one like Coca-Cola, but in my niche people now know my company and my products which is great for business.
In my case I've also had to resort to permie roles, but they were short periods so it didn't make sense to wind down the company...

I would agree if it was a company with promotional material and all that in the real sense of a company....but the vast majority don't tend to work like that and the closest we get to brand is the company name on clients email. Hell, most of the contractors here don't even have their company name on their linked in so it's nigh on invisible.

Most of my clients, and indeed the other contractors don't know what the companies are called so binning it and appearing with a new company won't matter a jot.