Change company for inside contract and close previous co.?

[mondeoman]

Background:
In risk mitigation mode now, cant afford to not work, warchest sunk into another venture that will take time to bear fruit and client has blanket assessed everyone as inside, despite QDOS assessment of contracts as outside. Been there a while, and I've challenged the assessment with a lot of data, but not hopeful of a positive result. Cant find any other contracts or perm positions, so looks like I'll have to transfer to inside via Agency, Umbrella or Ltd. Suggests a High risk of investigation..... (!) but cant see any way to avoid it unless a miracle happens in the next 2 weeks.

My thoughts are:

Request a new contract from the agency, with a new company name (I do have other companies registered that I can resurrect very quickly as they are currently dormant), to go live with the new contract from 01-04, pay up VAT and PAYE etc... at the end of March and advise HMRC that current company no longer has any employees, then leave the current company dormant for 3 months and get it struck off, as it has no assets and no liabilities. Neat and clean: due diligence has been shown with the current contract, I've stuck to working as a contractor - no attendance at company meetings / management events, no appraisals, no direction or control, no working on non-project specific activities and so on, challenged the SDS, and then cancelled the contract when the hypothetical contract got changed.

Is that enough to avoid retrospective and maintain the corporate veil?

Or just go brolly and do the same, but without a new co.?

What a mess.

[northernladuk]

Background:
In risk mitigation mode now, cant afford to not work, warchest sunk into another venture that will take time to bear fruit

So not a warchest at all then.

fruit and client has blanket assessed everyone as inside, despite QDOS assessment of contracts as outside. Been there a while, and I've challenged the assessment with a lot of data, but not hopeful of a positive result. Cant find any other contracts or perm positions, so looks like I'll have to transfer to inside via Agency, Umbrella or Ltd. Suggests a High risk of investigation..... (!)

Very.

but cant see any way to avoid it unless a miracle happens in the next 2 weeks.

Tighten your belts and life off the absolute bear minimum? There should be a lot popping up as people that can't travel will leave so should plenty of roles to backfill appearing in the next couple of weeks.

Request a new contract from the agency, with a new company name (I do have other companies registered that I can resurrect very quickly as they are currently dormant), to go live with the new contract from 01-04, pay up VAT and PAYE etc... at the end of March and advise HMRC that current company no longer has any employees, then leave the current company dormant for 3 months and get it struck off, as it has no assets and no liabilities. Neat and clean: due diligence has been shown with the current contract, I've stuck to working as a contractor - no attendance at company meetings / management events, no appraisals, no direction or control, no working on non-project specific activities and so on, challenged the SDS, and then cancelled the contract when the hypothetical contract got changed.

Is that enough to avoid retrospective and maintain the corporate veil?

Not at all.

Or just go brolly and do the same, but without a new co.?

Nope. You are outside, you are going inside. You are HMRC's low hanging fruit, particularly with a good period of time at the client. Can't sprinkle any glitter on it.

What a mess.

Yup.

[eek]

What a mess.

All your plans have the same flaw - you are remaining with the same agency / client and if HMRC are looking for such things they will spot you regardless of the approach used. As NLUK says, you are low hanging fruit...

[mondeoman]

All your plans have the same flaw - you are remaining with the same agency / client and if HMRC are looking for such things they will spot you regardless of the approach used. As NLUK says, you are low hanging fruit...

Damn, cant even get a way to at least pull my legs up...

[WordIsBond]

Is that enough to avoid retrospective and maintain the corporate veil?

These are two different questions.

In my view, it is enough to maintain the corporate veil. I could be wrong, and it would be costly to you if I am.

To accept the role as an inside role would, in my view, be more likely to risk piercing the veil than going brolly. If you go brolly, you are saying that because of the client's decision (with which you disagree) you no longer want to have a Ltd Co. But if you accept an inside determination, you are tacitly accepting the client's decision, which makes it easier for them to say you were wrong to operate outside all along (they'll say that anyway) AND KNEW IT. That's piercing the veil stuff. I believe going brolly with the same agent/client is dangerous but working inside through a Ltd is even more dangerous.

The important thing for you, where your Ltd apparently doesn't really have any funds, is that there really only is one question that matters -- can they pierce the veil. They can retrospectively investigate all they want, but if there's no money in the company and they can't pierce the veil it doesn't hurt you.

Close the company if you can, obviously after VAT/PAYE/Corporation Tax. If you get it closed, it's very, very unlikely they'd ever investigate. But if they stop you closing and investigate but there's no money, then there's no money. Whatever you do, DON'T NEGLECT those three taxes, or they will pierce the veil, and rightly so.

These guys are right that all your plans leave you vulnerable to historical investigation, and would make it harder for you to win if that happens. But in your case, the fact that there's no significant money in your company means that the risk is probably small. You've done enough to lessen the risk that they could pierce the veil, and that probably makes you pretty safe, as long as you pay the taxes you have to and empty the company and shut it down.