two in one

[expat]

Real companies would never be in this position.

You have two people, both of which want to be paid exactly the amount of income that they bring to the company.

And those two people want 95% of their income to come via dividend payments, so it has to be paid in proportion to their shareholding.

A real company would make the apportioned payments via PAYE.

tim

Yes, shareholders of a real company expect to be paid without bringing any income to the company. Naturally they would not pay NICs on what they receive, that is only for those who have actually worked for their money.

[tim123]

so how do "real" companies do it? never been entirely sure of this

Real companies would never be in this position.

You have two people, both of which want to be paid exactly the amount of income that they bring to the company.

And those two people want 95% of their income to come via dividend payments, so it has to be paid in proportion to their shareholding.

A real company would make the apportioned payments via PAYE.

tim

[PhilAtBFCA]

Substitution

Are you both doing the same type of work? Could you substitute for each other if the need arose?

If so then I'm guessing (but don't know for sure) this might make it easier to work under 1 ltd co - you could get your contracts written to allow your business services to be delivered by either of you - that might work?

For substitution it should also be OK for the brother to be working through his own Ltd Co and contract to the company of dehydratedskulls.

I think you would be better off with your own company's, far more flexible from a tax planning point of view and less risk for both of you.

Phil

[Cheshire Cat]

Hire your brother as an employee of your company, let him work his nuts off from dawn til dusk, and pay him min wage.
That'll teach him for breaking your Optimus Prime when you were 7.
See how he likes THEM apples.

[moorfield]

Are you both doing the same type of work? Could you substitute for each other if the need arose?

If so then I'm guessing (but don't know for sure) this might make it easier to work under 1 ltd co - you could get your contracts written to allow your business services to be delivered by either of you - that might work?

Guess it could certainly work if you were identical twins. What a great wheeze that would be.

[MPwannadecentincome]

Are you both doing the same type of work? Could you substitute for each other if the need arose?

If so then I'm guessing (but don't know for sure) this might make it easier to work under 1 ltd co - you could get your contracts written to allow your business services to be delivered by either of you - that might work?

[jmo21]

Not really, since IR35 is applied on a per contract basis. At best it might help muddy the waters re the nature of your business.

Would keep it all separate really. Depends how well you get on with your brother.

so how do "real" companies do it? never been entirely sure of this

[DaveB]

Run your own seperate companies and sub out work to eachother when you can is the best way to do it and get out of IR35.

[moorfield]

My question:
would it be better if he set up his own LTD or joined mine as a director/employee ?
I'm thinking of improved ir35 mitigation as well as tax benefits.

Not really, since IR35 is applied on a per contract basis. At best it might help muddy the waters re the nature of your business.

Would keep it all separate really. Depends how well you get on with your brother.

[dehydratedskulls]

Thanks!

Just got this from my account:

"If your brother is carrying out the same work as you then it would be possible for him to contract through the same company. However, it can get quite complex when it comes to taking money from the company. This is because if you make him a shareholder, then every dividend the company declares needs to be issued in the ratio of the shareholding. It is therefore very hard to work out the an appropriate shareholding, as you may have different incomes each month and would therefore not receive the correct level of income.

It may therefore be easier for your brother to operate through his own limited company"

[pmeswani]

Hi
My first post, so please be gentle.

I have my own ltd - been running for about one year.
I pay myself 11K salary and take dividends.
My brother is also a contractor.

My question:
would it be better if he set up his own LTD or joined mine as a director/employee ?
I'm thinking of improved ir35 mitigation as well as tax benefits.

(I'm waiting on feedback from my accountant - but I also wanted other viewpoints)
Thanks!

He would be better setting up his own Ltd Company. At the end of the day, if one person screws up, the whole company could end up becoming bankrupt. That would affect all the directors of the company.

[dehydratedskulls]

Hi
My first post, so please be gentle.

I have my own ltd - been running for about one year.
I pay myself 11K salary and take dividends.
My brother is also a contractor.

My question:
would it be better if he set up his own LTD or joined mine as a director/employee ?
I'm thinking of improved ir35 mitigation as well as tax benefits.

(I'm waiting on feedback from my accountant - but I also wanted other viewpoints)
Thanks!