Reply to: Contracting through a LTD Co whilst not being a director

[northernladuk]

https://www.gov.uk/government/upload...worked-out.pdf

Income includes dividends for CSA calculation (pages 45 and 46) so if this is the intention then it won't make any differnece unless someone lies about their income.

Ah yes, sorry I was angling at keeping retained profits to artificially lower his income which I thought he couldn't do but reading up that's in the case of divorces when the company is an asset, not in the case of CSA so it's company money not his.

I misread your original post incorrectly which started me off on the wrong path. Am just gonna.... like.... quietly crawl back under my rock. Nothing to see here. Move on.....

[LondonManc]

Not so sure about that.

Contractors' Questions: Does the CSA consider dividends? :: Contractor UK

They can request the company accounts as part of the process. I'd guess he's either trying not to be found hence hiding his address or hiding the fact he's a director to try and avoid declaring his dividend income. Either way he's going to come unstuck eventually and when he does it's going to be a rough ride for him.

That said we've no idea if this is the case anyway.

As you say, we've no idea.

Best advice if you don't want your name "in lights" is to go umbrella and take the hit on the tax.

[missinggreenfields]

Not so sure about that.

Contractors' Questions: Does the CSA consider dividends? :: Contractor UK

They can request the company accounts as part of the process. I'd guess he's either trying not to be found hence hiding his address or hiding the fact he's a director to try and avoid declaring his dividend income. Either way he's going to come unstuck eventually and when he does it's going to be a rough ride for him.

That said we've no idea if this is the case anyway.

https://www.gov.uk/government/upload...worked-out.pdf

Income includes dividends for CSA calculation (pages 45 and 46) so if this is the intention then it won't make any differnece unless someone lies about their income.

[northernladuk]

I've been lucky enough to not have any dealings with CSA, but don't you have to declare your income anyway? Not being a director wouldn't help there, but being a cad might.

Not so sure about that.

Contractors' Questions: Does the CSA consider dividends? :: Contractor UK

They can request the company accounts as part of the process. I'd guess he's either trying not to be found hence hiding his address or hiding the fact he's a director to try and avoid declaring his dividend income. Either way he's going to come unstuck eventually and when he does it's going to be a rough ride for him.

That said we've no idea if this is the case anyway.

[missinggreenfields]

I don't personally care, I'm through a "normal" ltd framework. It's unfortunate that this person feels threatened; I hope they're not doing it to simply avoid ex-wife/CSA claims.

I've been lucky enough to not have any dealings with CSA, but don't you have to declare your income anyway? Not being a director wouldn't help there, but being a cad might.

[LondonManc]

The problem (or potential problem) here is not who owns the company and who is a shareholder, it's the old thing about shadow directors. If you are directing the company's business and financial activities while someone else pretends to be a director, then HMRC will take a close interest in both your tax affairs since this is a potential for evasive activities as well as being potentially fraudulent (not in your case, perhaps, but that isn't the issue). It is covered in the Companies Act 2006 and a good summary of the risks are over here.

If you're genuinely worried about privacy then talk to Companies House. Don't risk triggering an investigation just to set up an unnecessary pretend organisation.

I don't personally care, I'm through a "normal" ltd framework. It's unfortunate that this person feels threatened; I hope they're not doing it to simply avoid ex-wife/CSA claims.

[LondonManc]

Yeah but there is other governance and procedure in place in that model. The shareholder doesn't have access to the business bank account and so on. I see what you are saying but I don't think big business and our model compare. Just seems wrong. Maybe I'm over thinking it.

The legalities are the same, size matters not. Does the shareholder need access to the business bank account, or simply enough influence to "encourage" the MD to declare a dividend.

What the OP's intended role within the company is could be interesting though, especially from both an insurance and remuneration standpoint.

[malvolio]

How many behind the scenes major shareholders actually pull the strings in big business? Quite a few I'd suggest, where they want to influence the company (and moreover an industry).

The problem (or potential problem) here is not who owns the company and who is a shareholder, it's the old thing about shadow directors. If you are directing the company's business and financial activities while someone else pretends to be a director, then HMRC will take a close interest in both your tax affairs since this is a potential for evasive activities as well as being potentially fraudulent (not in your case, perhaps, but that isn't the issue). It is covered in the Companies Act 2006 and a good summary of the risks are over here.

If you're genuinely worried about privacy then talk to Companies House. Don't risk triggering an investigation just to set up an unnecessary pretend organisation.

[missinggreenfields]

How many behind the scenes major shareholders actually pull the strings in big business? Quite a few I'd suggest, where they want to influence the company (and moreover an industry).

I'm sure that there will be ways round it - I know some people use convoluted offshore ownership structures for their businesses (not contractors that are using dodgy loans), but the trail gets cold once you hit places in Jersey and Guernsey.

I have a few companies on my watch list that I'm waiting to see what they publish because there structures are very "interesting" to say the least.

[northernladuk]

How many behind the scenes major shareholders actually pull the strings in big business? Quite a few I'd suggest, where they want to influence the company (and moreover an industry).

Yeah but there is other governance and procedure in place in that model. The shareholder doesn't have access to the business bank account and so on. I see what you are saying but I don't think big business and our model compare. Just seems wrong. Maybe I'm over thinking it.

[LondonManc]

I've been thinking about this since the OP posted and it just didn't seem right. I had a question about who is the director and does that person really understand their legal obligations or are you just using a mule. It also just seemed far too easy to do as the OP said and surely there is something else to consider. It just all seems too slack. MS's post explains it but it just doesn't seem to sit right that a major shareholder can effectively run a company with a puppet director in. Just seems far too open for abuse but apparently and reputable account said he can.

I guess the major stopped is usually the agent wouldn't touch this set up but in this case they seemed to be OK.

If the OP wants to claim a salary he's going to have to setup a contract of enjoyment, will have to pay NMW and will have to set up a company pension as part of the new rules etc?

How many behind the scenes major shareholders actually pull the strings in big business? Quite a few I'd suggest, where they want to influence the company (and moreover an industry).

[northernladuk]

I've been thinking about this since the OP posted and it just didn't seem right. I had a question about who is the director and does that person really understand their legal obligations or are you just using a mule. It also just seemed far too easy to do as the OP said and surely there is something else to consider. It just all seems too slack. MS's post explains it but it just doesn't seem to sit right that a major shareholder can effectively run a company with a puppet director in. Just seems far too open for abuse but apparently and reputable account said he can.

I guess the major stopped is usually the agent wouldn't touch this set up but in this case they seemed to be OK.

If the OP wants to claim a salary he's going to have to setup a contract of enjoyment, will have to pay NMW and will have to set up a company pension as part of the new rules etc?

[mudskipper]

And also, being the major shareholder I would not be searchable on companies house.

As before, please see

https://companieshouse.blog.gov.uk/2...trol-register/

https://www.gov.uk/government/upload..._and_SEsv4.pdf

"From 6 April 2016 companies, Societates Europaeae (SEs) and Limited Liability Partnerships
(LLPs) must keep a register of individuals or legal entities that have control over them. This
is in addition to keeping other information, such as a register of members and a register of
directors.

1.1.2 From 30 June 2016 onwards companies, SEs and LLPs will have to deliver this information
annually to the central public register at Companies House when making a Confirmation
Statement"


If you have control of the company, within a year your details will be searchable.

[SamuelP]

*** Update ***

Thought I'd give an update on this topic as I posted the original question.

I contacted a firm of reputable chartered accountants who informed me there was absolutely nothing wrong, illegal or immoral with not being a director.
However, they said the agency could have issues as they require the contractor to be in control of the company.
But, if I was the major shareholder, I would essentially be in control of the company.
And also, being the major shareholder I would not be searchable on companies house.

For a small fee, the company can also be registered at the accountant's office.

I checked with the agency, explained the problem, and they are absolutely fine with it, and the client doesn't care.

Problem solved!

[m0n1k3r]

No, there is no legal requirement. But its not unusual for clients (agencies at least) to insist that you are. I don't really know why.

Clients don't care. It is the agencies who require this. As usual with agents, it is to mitigate their own risk. Having a regular employee of the LtdCo perform the work is actually less risk for them, but on the other hand they don't understand that concept - for them the LtdCo is a technical detail only there to minimise their liability, but for all other intents and purposes non-existing.

They work on placing 'temps', not brokering the services of employees of micro-consultancies.