Reply to: "Phoenixing" issue - sue SJD, or any other solution?

[Rossco]

@Rossco you say you wrapped up your company in June 2015, so presumably any/all distributions of final funds were pre 5 April 2016? If so, then the "new" rules shouldn't apply. There was still transactions in securities legislation in place before these new rules, but a key thing was the absence of the two year timescale. I think the majority of us believed under the "old" rules that perhaps a 6-12 month gap would be sufficient to justify it wasn't continuing the same trade. If nothing else, reality is the new rules were brought in because the old ones simply didn't work as HMRC wanted them to...which realistically means the taxpayer could "get away with" behaviour HMRC didn't like.

However I note further down your post you say you have no intention of working consecutively, in which case I'd suggest regardless of the previous company closure creating a new company probably isn't right for you. If hypothetically you did just one (say) 6 month gig then wanted to close again, the admin cost/hassle of using a company for that would make it not worthwhile. Similarly if you perhaps did (say) one 3 month contract every year, relaxing the other 9 months, you'll find accountancy costs not much different to if you were working 12 months of the year. Hence umbrella may be more suitable for this reason.

thanks all and especially Maslins (i was hoping you'd offer your opinion ).

It's a very good point, my default position is going to be to use my umbrella, or another umbrella, i don't want to work 12 months a year in an ideal world and the admin of running a ltd, albeit small isn't insignificant and doesn't fit with my aspirations.

I'll see what they think. if it were a deal breaker i could setup a ltd, use it for this gig then place it dormant i guess. though i've never done that before, i'm 45 so likely to pick up bits of work for some time yet

[missinggreenfields]

Been following this thread with eager eyes

In June 2015 i wrapped up my ltd, having been contracting down in that there London for 5.5 years and having grown tired of it.

I intended to do something different, a bit of investing, a bit of tinkering, perhaps a total change. I didn't know and was quite happy with that.

I kicked back from Mid June through the summer, never looked for work and just did some stuff on my house. The ftse took a beating which hurt my income.

In September 2015 i took a short contract through an Umbrella, this got extended a couple of times and i'm just finishing that now, Sept 2016.

I was intending on kicking back again but someone contacted me about a gig just down the road. They would like me to have a ltd for this.

I guess that's risky? I prefer umbrella as i have no intention of working consecutively, this has just fallen badly. Am i right in assuming it's not a good idea?

The legislation on company distributions changed in April 2016. Unless it was retrospective legislation (!) then I don't see any risk in starting a new company now based on you closing the company down under different rules.

[Maslins]

@Rossco you say you wrapped up your company in June 2015, so presumably any/all distributions of final funds were pre 5 April 2016? If so, then the "new" rules shouldn't apply. There was still transactions in securities legislation in place before these new rules, but a key thing was the absence of the two year timescale. I think the majority of us believed under the "old" rules that perhaps a 6-12 month gap would be sufficient to justify it wasn't continuing the same trade. If nothing else, reality is the new rules were brought in because the old ones simply didn't work as HMRC wanted them to...which realistically means the taxpayer could "get away with" behaviour HMRC didn't like.

However I note further down your post you say you have no intention of working consecutively, in which case I'd suggest regardless of the previous company closure creating a new company probably isn't right for you. If hypothetically you did just one (say) 6 month gig then wanted to close again, the admin cost/hassle of using a company for that would make it not worthwhile. Similarly if you perhaps did (say) one 3 month contract every year, relaxing the other 9 months, you'll find accountancy costs not much different to if you were working 12 months of the year. Hence umbrella may be more suitable for this reason.

[SueEllen]

I was intending on kicking back again but someone contacted me about a gig just down the road. They would like me to have a ltd for this.

I guess that's risky? I prefer umbrella as i have no intention of working consecutively, this has just fallen badly. Am i right in assuming it's not a good idea?

Why can't the client deal with you through an umbrella?

And no it isn't a good idea to start another limited as you don't want to be the person HMRC makes an example of.

[Rossco]

Been following this thread with eager eyes

In June 2015 i wrapped up my ltd, having been contracting down in that there London for 5.5 years and having grown tired of it.

I intended to do something different, a bit of investing, a bit of tinkering, perhaps a total change. I didn't know and was quite happy with that.

I kicked back from Mid June through the summer, never looked for work and just did some stuff on my house. The ftse took a beating which hurt my income.

In September 2015 i took a short contract through an Umbrella, this got extended a couple of times and i'm just finishing that now, Sept 2016.

I was intending on kicking back again but someone contacted me about a gig just down the road. They would like me to have a ltd for this.

I guess that's risky? I prefer umbrella as i have no intention of working consecutively, this has just fallen badly. Am i right in assuming it's not a good idea?

[Maslins]

What would the typical accountancy fee be to produce final accounts out of interest? I guess with SJD you are getting the two.

Insolvency is such a murky industry and is in desperate need of further regulation.

Typical fee I'm afraid is akin to length of a piece of string. For a typical contractor company who hasn't been paying monthly, perhaps £500-1,000+VAT. Bear in mind for a closing set there'll be a little more bit work than usual.

With a typical contractor accountant (including ourselves and SJD) then you'd typically have paid for them already as part of your monthly fee.

Re murky industry/regulation...the latter often doesn't really help! Liquidators are prohibited from paying "finders fees"/commissions to accountants (as could arguably hinder the accountant from giving unbiased advice). Problem is liquidators can pay funds to accountants for accountancy work done. This seems to be a handy workaround for some. That's a different matter to the sharp business practice of charging extra fees if a client wishes to go elsewhere...I'd suggest in that situation the liquidator's doing nothing wrong, it's the accountant charging what is in essence an "exit fee" that's questionable.

[Scratch It]

You're correct accountants can't complete MVLs, only licensed insolvency practitioners. SJD Insolvency will of course have one of these.

I appreciate most people above have suggested the OP wouldn't have much chance of a successful legal claim against SJD regardless, but if hypothetically they did, I'd suggest it'd be the accountancy arm. Liquidators do liquidations, accountants should be the ones dealing with the tax advice, hence helping in the decision as to whether or not it's a good idea.

One SJD accounting client was pointed towards SJD Insolvency, who were quoting £1,995+VAT +distributions. That client approached MVL Online, at about half the fee. He went back to SJD accountants saying he'd like to use MVLO. SJD accountancy division then said they'd need to charge an extra £1,000+VAT accountancy fee for extra work required if the client were to use a different liquidator. This practice is unfortunately entirely legal, as of course they'd argue it's genuinely down to extra work required, rather than just some anti-competitive tactic. "Like the Murphys..." and all that

With SJD accountancy having huge numbers of contractor clients, and the lifespan of a typical contractor company being relatively short, it's no surprise that SJD insolvency are doing a LOT of business.

What would the typical accountancy fee be to produce final accounts out of interest? I guess with SJD you are getting the two.

Insolvency is such a murky industry and is in desperate need of further regulation.

[oracleslave]

I have only ever used 2 contractor accountants, SJD and Clearsky Accounting.
IMHO - SJD were by far the better of the two.

As for the MVL - am currently going through that with Maslins co based on reviews from others on here and what I consider to be the many useful contributions he has made on here.

[MrMarkyMark]

I'll counter that with; I've been with SJD for 6 years and I'm really happy with their service. I've got a great accountant assigned to me and find their spreadsheet a useful tool, not only for general accounting but for what-if scenarios when I'm looking at two contracts in different places; I can weigh up the bottom line for contracts in different locations with different levels of rate and expenses very easily.

+1, I have been a customer since they were very small.

My accountant is excellent and always gives answers and additional extra advice.
An email will usually be turned round in less than 2 hours.
This has consistently been the case since I started, obviously YMMV.

My Mrs. is with QDOS Accounting, yes, they are cheaper, but seem totally disorganised IMO.
They have already made a few mess ups, not serious, but not good, as she has only been with them a year.

[LondonManc]

Maslins can't say it. So I will. SJD's remaining customers need to wake up and vote with their feet. The venture capitalists paid way over the odds for Mr Dolan's business (nice one Simon) and they have to get their money back anyway they can. Look around, there are better and cheaper options everywhere you look, almost.

I'll counter that with; I've been with SJD for 6 years and I'm really happy with their service. I've got a great accountant assigned to me and find their spreadsheet a useful tool, not only for general accounting but for what-if scenarios when I'm looking at two contracts in different places; I can weigh up the bottom line for contracts in different locations with different levels of rate and expenses very easily.

[Fred Bloggs]

Maslins can't say it. So I will. SJD's remaining customers need to wake up and vote with their feet. The venture capitalists paid way over the odds for Mr Dolan's business (nice one Simon) and they have to get their money back anyway they can. Look around, there are better and cheaper options everywhere you look, almost.

[Maslins]

I dont think anyone has mentioned this yet, but SJD insolvency services (i think that's the name) are a separate legal entity to SJD accountancy. I'm sure that you know this - though the implication is that you need to make sure that you are speaking to your insolvency practitioner, not your accountant. I dont think that accountants can complete MVLs - though I could be wrong.

Incidentally, SJD insolvency have quickly become one of the largest insolvency practices in the UK, for what I suspect is completing contractor MVLs exclusively.

You're correct accountants can't complete MVLs, only licensed insolvency practitioners. SJD Insolvency will of course have one of these.

I appreciate most people above have suggested the OP wouldn't have much chance of a successful legal claim against SJD regardless, but if hypothetically they did, I'd suggest it'd be the accountancy arm. Liquidators do liquidations, accountants should be the ones dealing with the tax advice, hence helping in the decision as to whether or not it's a good idea.

One SJD accounting client was pointed towards SJD Insolvency, who were quoting £1,995+VAT +distributions. That client approached MVL Online, at about half the fee. He went back to SJD accountants saying he'd like to use MVLO. SJD accountancy division then said they'd need to charge an extra £1,000+VAT accountancy fee for extra work required if the client were to use a different liquidator. This practice is unfortunately entirely legal, as of course they'd argue it's genuinely down to extra work required, rather than just some anti-competitive tactic. "Like the Murphys..." and all that

With SJD accountancy having huge numbers of contractor clients, and the lifespan of a typical contractor company being relatively short, it's no surprise that SJD insolvency are doing a LOT of business.

[Scratch It]

I dont think anyone has mentioned this yet, but SJD insolvency services (i think that's the name) are a separate legal entity to SJD accountancy. I'm sure that you know this - though the implication is that you need to make sure that you are speaking to your insolvency practitioner, not your accountant. I dont think that accountants can complete MVLs - though I could be wrong.

Incidentally, SJD insolvency have quickly become one of the largest insolvency practices in the UK, for what I suspect is completing contractor MVLs exclusively.

[gables]

A guy who was pulling in £700 / day or more is not likely looking for training opportunities nor particularly concerned with what happens in public sector contracting.

Umm, I didn't mention PS and also got the impression the OP was risk averse. And anyway 700/day or 50/day if you stop looking to learn\train then I reckon you're on a sticky wicket.

[missinggreenfields]

A guy who was pulling in £700 / day or more is not likely looking for training opportunities nor particularly concerned with what happens in public sector contracting.

You presume that any changes will only apply to public sector. If any changes work in public, they will be rolled out to private sector.