Reply to: Closing company and going umbrella with same end client

[craigy1874]

Why not? The TAAR applies to any capital distribution if all the tests are met - I don't remember there a "as long as its over £25k" rule. A capital distribution of £25k would still yield a decent tax saving versus dividends if you're a higher rate tax payer and are eligible for ER due to the CGT allowance and 10% CGT rate.

The TAAR only applies to liquidations, if you close down with < £25k you are not liquidating the company, hence the TAAR doesn't apply.

You will find it in the legislation, I am not going to try and find it again and post it here.

[cjping]

Why did you want to close the company if you're outside? Best to keep it running.

Primarily to get the money out of the company and get ER on it. I don't see contracting has a long term future, for me anyway. So ultimately I would end up going perm somewhere.

[genius]

Why did you want to close the company if you're outside? Best to keep it running.

[Paralytic]

Coming back to this old thread.... I've been offered a permanent role, same client, with such a great package that I'd be mad to turn down. Given that there are no employees doing the same role as me, and never have been, if I were to take the permanent role and close the company down would that put me at risk of being clobbered as inside IR35 for the time contracting previously?

Yes, that risk is always there. The thing you need to measure is: how likely are HMRC to come calling?

From your description, that sounds unlikely based on the role alone, but who's to know that you won't do something in the next 6 years that means HRMC look into your affairs...

How long were have you been contracting there for? I'd be working out the potential lax liability, were all of that time retrospectively declared inside, and make my decision based on that.

[cjping]

Coming back to this old thread.... I've been offered a permanent role, same client, with such a great package that I'd be mad to turn down. Given that there are no employees doing the same role as me, and never have been, if I were to take the permanent role and close the company down would that put me at risk of being clobbered as inside IR35 for the time contracting previously?

[vas]

My understanding is it's basically impossible for a contractor to qualify for this.

Seems logical not to be possible to get £30000 redundancy payment if you are director-employee.

[Maslins]

Is this true
Seriously what are the rules/law on a LTD director (also on employment contract) to pay themself redundancy of upto £30000 (or £20000 was it)?

My understanding is it's basically impossible for a contractor to qualify for this.

[Lance]

Is this true
Seriously what are the rules/law on a LTD director (also on employment contract) to pay themself redundancy of upto £30000 (or £20000 was it)?

I don't know. All I know is he did it. And got the money.
I'm not close to retiring so not something I've investigated.

Perhaps JtB will be along soon to help. He's old and well up on employment rights.

[vas]

an ex-contractor I know, retired, and got the government to cough up some of the statutory redundancy as his CO was skint. Sounds a bit dodgy like, but he got the cash.

Is this true
Seriously what are the rules/law on a LTD director (also on employment contract) to pay themself redundancy of upto £30000 (or £20000 was it)?

[adubya]

Yes, interesting option.

A comparison between striking off and MVL: Striking off Vs. Liquidation - Company Debt

[TheCyclingProgrammer]

If assets are under £25k you don't need an MVL to dissolve the company and take capital - you can do it by just striking off the company.

There are a few sources on the web that suggest that the Phoenixing TAAR does not apply on strike-off - here's one example. It may of course be wrong, but it's a question worth asking.

Interesting, thanks for that. I don’t remember this coming up in the numerous discussions we have had on here about this in the past.

[Amanensia]

If assets are under £25k you don't need an MVL to dissolve the company and take capital - you can do it by just striking off the company.

There are a few sources on the web that suggest that the Phoenixing TAAR does not apply on strike-off - here's one example. It may of course be wrong, but it's a question worth asking.

[TheCyclingProgrammer]

You also don't need to worry about it if you take the < £25k as a capital distribution.

Why not? The TAAR applies to any capital distribution if all the tests are met - I don't remember there a "as long as its over £25k" rule. A capital distribution of £25k would still yield a decent tax saving versus dividends if you're a higher rate tax payer and are eligible for ER due to the CGT allowance and 10% CGT rate.

[Lance]

Don’t forget your £30K tax free redundancy pay 1st

an ex-contractor I know, retired, and got the government to cough up some of the statutory redundancy as his CO was skint. Sounds a bit dodgy like, but he got the cash.

[GhostofTarbera]

Don’t forget your £30K tax free redundancy pay 1st




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