Originally posted by MrC
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Reply to: Continuing the trade - drilling down
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Previously on "Continuing the trade - drilling down"
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Originally posted by Lance View PostIf you think there’s a realistic proposition of contracting via a LTD at any point in the next two years then don’t take a capital distribution.
That’s it in a nutshell.
ER is immaterial. So is what you do in between.
I’d keep the company going, on reduced accountant fees (most do a deal).
If you want to save the accountancy then close the company but take dividends rather than capital. That way you can start again easily.
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If you think there’s a realistic proposition of contracting via a LTD at any point in the next two years then don’t take a capital distribution.
That’s it in a nutshell.
ER is immaterial. So is what you do in between.
I’d keep the company going, on reduced accountant fees (most do a deal).
If you want to save the accountancy then close the company but take dividends rather than capital. That way you can start again easily.
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Originally posted by northernladuk View PostThis is HMRC we are talking about so feck knows what will happen..But you already have the opinions of other people from other threads.
What is your reason for closing it down and going brolly?
What else are you after?
How about answers to these 3 questions in the OP for starters:
I know HMRCs guidance leaves a lot of questions unanswered but surely by now people have been through the mill with this?
Is it because it's all case law and there's no precedent?
Or perhaps because anyone who's lost a court case on this has kept schtum?
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This is HMRC we are talking about so feck knows what will happen..But you already have the opinions of other people from other threads.
What is your reason for closing it down and going brolly?
What else are you after?
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Couple of other examples show this isn't universally clean cut:
in fact that whole thread shows that people have different views.
another example which shows there's some perceived risk in LTD>Brolly:
Scenario is clear intention to semi retire or retire or equally someone intending to find and stick out perm work, but then it doesn’t work out
In theory this is fine, but that depends on you being able to convince HMRC (or, ultimately, a court) that the liquidation was "genuine", ie not driven by tax considerations alone. This may be easier in some circumstances than others (eg if you took a permie job but were subsequently made redundant etc that would most likely be OK; but quitting after 6 months for no obvious reason would probably not.) Where the line lies precisely? No idea, and will almost certainly depend on the specific circumstances of each case. I wouldn't expect proving this point in your favour to be straightforward in most cases.
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Originally posted by northernladuk View PostNot sure why it's subjective. Option 1 total no goer. All the others are fine.
IMO you are employed as an Umbrella client so I don't see how they can have a problem with it.
Opinions are inherently subjective.
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Not sure why it's subjective. Option 1 total no goer. All the others are fine.
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Continuing the trade - drilling down
Assuming wind up of ContractorCo and an ER claim...
I'll summarise the range of opinions I've seen on here (lowest --> highest risk):
- Start NewCo in same trade: 'You might not get caught' --> Total slam dunk
- Brolly in same field: Moderate risk --> Low risk
- Fixed term PAYE contract: ?
- Permie : Zero --> Low risk
Given the spectrum of opinons on each scenerio it seems the risk is somewhat subjective and I want to understand why.
I'm aware this topic pops up here every few weeks, but I wanted to get to the crux of the thinking behind the perceived risks.
I know HMRCs guidance leaves a lot of questions unanswered but surely by now people have been through the mill with this?
Is it because it's all case law and there's no precedent?
Or perhaps because anyone who's lost a court case on this has kept schtum?Tags: None
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