Does anyone have any information on this? if you've been at the same client for a few years with the contract renewed annually (contract deemed to be outside IR35l) does it seem reasonable for accountant to advise closing ltd and starting a new company? I'd have thought that getting insurance might be sensible but I'm not an accountant and dont know if hmrc is planning to do more clamping down - thanks for any advice.
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multi year contract at same client - accountant advises closing LTD and openi...
It is an attempt to get round the 24 month rule, which won't work....? -
I would see it more as an attempt to restrict exposure to IR35 for a long running contract. If the contracts are continually extended with the same client, I am not sure you could justify the closing down of the company, to open another with the same client the next day. This would just draw more attention I should think as there were no commercial reasons for shutting down.Originally posted by stek View PostComment
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multi year contract at same client - accountant advises closing LTD and openi...
Was supposed to be 'if it's.....'!Originally posted by Pondlife View Post
iPhone SpunkFlicker....spellchecker!!Comment
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If the contract and presumably working practises are outside IR35 why would it matter how long your at the companyOriginally posted by NonnyMouse View PostComment
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+1. Pointless extra hassle that won't help if HMRC decides to come knocking. Get your contract/working practice right, buy some insurance if you want, and carry on.Originally posted by Support Monkey View PostComment
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Closing a company and gaining a tax advantage just to open another and carry on is phoenixing and is much more likely to get you in trouble than anything you are trying (and failing) to avoid.
I would have though you might have asked him why he suggested this, what are you trying to (and failing to) avoid and what are the risks.'CUK forum personality of 2011 - Winner - Yes really!!!!
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According to this when you close a company it might trigger a routine PAYE compliance check which could blow up into an IR35 investigation.
Close down your company and avoid IR35 Investigations? | Forbes Young Contractor AccountantsI'm alright JackComment
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If your contract and working practices are outside of IR35 (I'm assuming you've had your contract reviewed & OKed by a reputable firm) then there's nothing to be gained. Normally it's the working practices that are a higher risk, so maybe a good time to review them? Insurance is always a good idea too.
There's lots you can do that's much simpler and less risky than create a new co, but if you're concerned then formulate an action plan to put things right in a safe and sensible way.
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