Contractor appointment as Director / Officer under IR35? Impact on contractor status

[malvolio]

What position do they want you to take on the Board? Is one option to be a Non-Executive Director (NED) instead?

The role doesn't matter. Its whether or not it is defined in the Articles (and hence is a "substantive post") that defines how it is treated. If it is then it has to be salaried. If it isn't then normal IR35 tests and conditions apply.

[edison]

Hi all - I am a chartered accountant providing consulting services to currently 4 clients on day rates through my limited company. One of the my clients wants me to sit on the Board, but I am fairly sure this will jeopardise my position with that client (and perhaps all my clients?) under IR35? I dont want to suddenly be paying income tax on the invoicing that my company does to the clients, so does anyone have any experience of this?

For example, could my company be appointed as the Director on the client company instead of me personally? Would that work?

Thanks in advance!

What position do they want you to take on the Board? Is one option to be a Non-Executive Director (NED) instead?

[Paralytic]

Indeed, which is never what is meant when people state 'under IR35' so best never using the term.

It's been pretty clear that when people say "under IR35" they mean "inside IR35".

But, I'm a pedant too, so, as you were...

[northernladuk]

Under = subject to = inside.

Indeed, which is never what is meant when people state 'under IR35' so best never using the term.

[malvolio]

Except this is not actually IR35. If a director of one company is appointed to a substantive role in another one, any income from that appointment must be taxed as salary. And has been for a long time.

But even with IR35 as the baseline, you cannot get around personal service and D&C anyway.

[eek]

There is no such thing as 'under' IR35. You are inside or outside.

Under = subject to = inside.

[northernladuk]

There is no such thing as 'under' IR35. You are inside or outside.

[WTFH]

I've seen contractors advertise that they perform "Financial Director Services", maybe ask one of them. Personally, I'd see it as dodgy ground where you are contracting to a company that you are also a director of. Sounds very much like a tax avoidance wheeze.

[eek]

I think you'd be better off asking this question on an accounting forum where you'll likely get multiple responses from experienced qualified accountants rather then here where likely you'll get a bunch of IT contractors giving you a hard time.

IR35 is a legal question more than an accountancy one.

On one level it's simple as as an officer of a company you are definitely inside IR35 but also your relationship with the company will be entirely different so that in a lot of ways is not surprising. And every contract is different so being a director of 1 company won't impact your relationship with your other clients unless those clients object to the idea.

The great unknown is whether a company should be a director of another company when it's a particular person doing all the work. I suspect it's not a problem but it would be an interesting (and expensive) case were HMRC to get interested - and that question would be one for an accountancy forum rather than an IT one.

It's also worth thinking of how it might look to customers of the end client - I know when I see opaque management structures I rapidly knock them off the to be contacted immediately list.

And equally as a client of yours I would probably have less objection to you personally being a director of a company than my accountancy firm being a director of a unrelated / competing company.

[jayn200]

I think you'd be better off asking this question on an accounting forum where you'll likely get multiple responses from experienced qualified accountants rather then here where likely you'll get a bunch of IT contractors giving you a hard time.

[courtg9000]

Hi all - I am a chartered accountant providing consulting services to currently 4 clients on day rates through my limited company. One of the my clients wants me to sit on the Board, but I am fairly sure this will jeopardise my position with that client (and perhaps all my clients?) under IR35? I dont want to suddenly be paying income tax on the invoicing that my company does to the clients, so does anyone have any experience of this?

For example, could my company be appointed as the Director on the client company instead of me personally? Would that work?

Thanks in advance!

With respect I would have thought that an accountant would know that a company could be appointed as a director of another company indeed this is quite common.

[ukDunc]

Hi all - I am a chartered accountant providing consulting services to currently 4 clients on day rates through my limited company. One of the my clients wants me to sit on the Board, but I am fairly sure this will jeopardise my position with that client (and perhaps all my clients?) under IR35? I dont want to suddenly be paying income tax on the invoicing that my company does to the clients, so does anyone have any experience of this?

For example, could my company be appointed as the Director on the client company instead of me personally? Would that work?

Thanks in advance!