Closing old company / starting a new one

[TheFaQQer]

Sounded like BS to me but given the initial post, then maybe that's what some ppl think they can do [& get away with it]?

Until they get caught, they get away with it. Closing down your company, working for another company, going to an umbrella, going direct etc etc does NOT reset the clock.

If you get caught, you get done for tax evasion.

[northernladuk]

This came up on conversation a couple of weeks ago at work with a new contractor [we were discussing the 24 month rule]. As a perm he'd apparently previously hired contractors that ended up staying in excess of 3/4 years. He was basically querying the validity of the 24 month rule. When I asked him how the contractors had got around the rule, he texted one of them there and then, who [in short] came bk & advised that he just created a new ltd co. and had the new contract put in new co name, & carried on claiming mileage etc.
Sounded like BS to me but given the initial post, then maybe that's what some ppl think they can do [& get away with it]?

Sadly this is all too common. It's a very complicated rule what with all the grey areas but the basics are pretty clear. It's all about location. If there is no significant change to the journey then the clock carries on ticking. This is explicitly covered here

https://www.gov.uk/hmrc-internal-man...anual/eim32080

This rule is modified where the employee works at a succession of workplaces but the change of workplace has no substantial effect on the employee’s journey to work. All such workplaces are treated as the same workplace for the purpose of the legislation, see EIM32280and example EIM32089.

People often forget if they leave a perm role in say Leeds and take up a contract in Leeds they are already caught.... as it goes on location. So starting a new company up won't work.

[SteelyDan]

Until they get caught, they get away with it. Closing down your company, working for another company, going to an umbrella, going direct etc etc does NOT reset the clock.

If you get caught, you get done for tax evasion.

I'm with you brother on this, but am just a bit taken aback by the general foolishness of the idea in principle & bad practice by some contractors. I guess they'd need to switch accountants too, or they'd be complicit wouldn't they?

[MojoDog]

Closing old company / starting a new one

The nature and scope of consultation / services that I will be offering is about to widen significantly beyond the scope of those offered by the original company that I set up.
Assuming that the contract gets renewed I will remain with my current client, but will also be working with clients from a completely different industry sector, with completely different consultation/service provision requirements.
All of which would be easier to deliver under the banner of a new company.

I'm not in the business of shady practices or rule-bending. Just wanted to make that clear. 🙂

[jmo21]

Until they get caught, they get away with it. Closing down your company, working for another company, going to an umbrella, going direct etc etc does NOT reset the clock.

If you get caught, you get done for tax evasion.

A contractor I know did none of this. He just moved to a new contract/company in the same location, and thinks that keeps him compliant with the 24 month rule.

I tried explaining to him that it doesn't work like that. "My accountant says it does" says he. Nothing I could do could convince him otherwise, even sending him the examples from the HMRC website.

[northernladuk]

A contractor I know did none of this. He just moved to a new contract/company in the same location, and thinks that keeps him compliant with the 24 month rule.

I tried explaining to him that it doesn't work like that. "My accountant says it does" says he. Nothing I could do could convince him otherwise, even sending him the examples from the HMRC website.

Exactly the same except the one I knew also used it to get the money out of the company in the most efficient way as well. His directors page on the company check sites looked more like a Gantt chart than a business history.

[SueEllen]

The nature and scope of consultation / services that I will be offering is about to widen significantly beyond the scope of those offered by the original company that I set up.
Assuming that the contract gets renewed I will remain with my current client, but will also be working with clients from a completely different industry sector, with completely different consultation/service provision requirements.
All of which would be easier to deliver under the banner of a new company.

I'm not in the business of shady practices or rule-bending. Just wanted to make that clear. 🙂

Good to hear!

[northernladyuk]

This came up on conversation a couple of weeks ago at work with a new contractor [we were discussing the 24 month rule]. As a perm he'd apparently previously hired contractors that ended up staying in excess of 3/4 years. He was basically querying the validity of the 24 month rule. When I asked him how the contractors had got around the rule, he texted one of them there and then, who [in short] came bk & advised that he just created a new ltd co. and had the new contract put in new co name, & carried on claiming mileage etc.
Sounded like BS to me but given the initial post, then maybe that's what some ppl think they can do [& get away with it]?

I had a contractor colleague a few years ago who had been claiming substantial travel expenses to the same site for four years. When I asked why / how, he replied, 'Because I want to and I probably won't get caught.'

[northernladuk]

I had a contractor colleague a few years ago who had been claiming substantial travel expenses to the same site for four years. When I asked why / how, he replied, 'Because I want to and I probably won't get caught.'

But he mysteriously got investigated a month later?

How much kick back do you get for reporting tax evaders nowadays?

[northernladyuk]

But he mysteriously got investigated a month later?

How much kick back do you get for reporting tax evaders nowadays?

Not me. I was seriously tempted once (same client as it happens) to dob in a contractor colleague who undercut me at renewal while she was using some film investment off-shore loan scam, but I couldn't bring myself to do it. I expect karma has caught up by now.