Reply to: SJD v NW advice = confusion

[Wanderer]

What, even if she doesn't? That's tax evasion and HMRC will see through i right away.

Yes, you are absolutely right. The spouse does actually have to do the work to earn their money and you would ideally have an audit trail to back this up.

Looking at what I wrote, I can see that the meaning is not very clear. When I said "say that the wife is paid for secretarial, personal assistant, bookkeeping and research work" I meant to use the word "say" as an adverb, as in "let's say" rather than as a verb as in "tell HMRC".

[psychocandy]

I'm with Northernladuk on this. A quiet discussion with the client about taking time off and if that fits in with their needs etc with agreement obtained and then followed up with a simple email stating that I will not be available for work on those days - no written reason given, no mention of "holidays" or "leave".

Thus, the "permission" is obtained verbally and good will maintained but the documented evidence makes it appear that you took the time and the client had no option other than to accept that you wouldn't be working those days.

My current client is pretty good about it anyway and has openly told me that I am free to take time out whenever I want and they would never presume that I would be available on any particular day.

Whenever you want. Thats pretty good.

Unfortunately, mine seems to be somewhat opposite. Permies take holidays and the project will work around them, contractors take time off when its convenient to the project.

[Wanderer]

I'm with Northernladuk on this. A quiet discussion with the client about taking time off and if that fits in with their needs etc with agreement obtained and then followed up with a simple email stating that I will not be available for work on those days - no written reason given, no mention of "holidays" or "leave".

Thus, the "permission" is obtained verbally and good will maintained but the documented evidence makes it appear that you took the time and the client had no option other than to accept that you wouldn't be working those days.

My current client is pretty good about it anyway and has openly told me that I am free to take time out whenever I want and they would never presume that I would be available on any particular day.

[northernladuk]

I do see what you mean, however I don't think its a problem letting the client know why I won't be available

I guess we are on the same page so will leave it at that. I just don't like the word 'holiday'. I don't get paid for not working so don't consider that a holiday. The only people that get holidays in it's official terms are permies and that is exactly what you are trying to avoid.

I guess I am being too pendantic now to the point of being anal.

[blacjac]

You have just used the word I would bend over backwards not to use. Permie get holidays. When you are trying to prove you are an independant supplier the last thing I would want to do is use the word holiday. Shoot me for being a pedant but there you go.

I do see what you mean, however I don't think its a problem letting the client know why I won't be available

[psychocandy]

The wording of mails is super pedantic I know but if it helps and causes no problems I would rather do it this way. My client here is pretty versed in contractor ways and is happy to accomodate. What I put in a mail is different to what I say to him. The courtesy for me is done during conversation, the mail is to back it up as evidence. You could add something on the end asking if this will be a problem to (whatever work you are doing). Asking if it will be problem could be argued to be different to asking him for permission.

Bear in mind the recent IR35 win was on some pretty fine details about client control I personally like to play the game on the safe side where it doesn't piss the client off. Others may think I am being to pedantic over non issues but that's their opinion.

Seems fair point. Just checking the wording of my email last week and it was pretty much that. Lucky then!

But yeh, I see what you mean. After all, banging out an email saying I will not be available for these two weeks regardless is not going to look good.

[northernladuk]

I personally put something like...

"I am planning on taking x - y off as holiday, would this cause the project any problems?"


That way you are not asking permission, but giving the client the option to raise concerns with the dates.

You have just used the word I would bend over backwards not to use. Permie get holidays. When you are trying to prove you are an independant supplier the last thing I would want to do is use the word holiday. Shoot me for being a pedant but there you go.

[blacjac]

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

The wording of mails is super pedantic I know but if it helps and causes no problems I would rather do it this way. My client here is pretty versed in contractor ways and is happy to accomodate. What I put in a mail is different to what I say to him. The courtesy for me is done during conversation, the mail is to back it up as evidence. You could add something on the end asking if this will be a problem to (whatever work you are doing). Asking if it will be problem could be argued to be different to asking him for permission.

Bear in mind the recent IR35 win was on some pretty fine details about client control I personally like to play the game on the safe side where it doesn't piss the client off. Others may think I am being to pedantic over non issues but that's their opinion.

I personally put something like...

"I am planning on taking x - y off as holiday, would this cause the project any problems?"


That way you are not asking permission, but giving the client the option to raise concerns with the dates.

[northernladuk]

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

The wording of mails is super pedantic I know but if it helps and causes no problems I would rather do it this way. My client here is pretty versed in contractor ways and is happy to accomodate. What I put in a mail is different to what I say to him. The courtesy for me is done during conversation, the mail is to back it up as evidence. You could add something on the end asking if this will be a problem to (whatever work you are doing). Asking if it will be problem could be argued to be different to asking him for permission.

Bear in mind the recent IR35 win was on some pretty fine details about client control I personally like to play the game on the safe side where it doesn't piss the client off. Others may think I am being to pedantic over non issues but that's their opinion.

[psychocandy]

Keep your own records of things you do instead of using the clients procedures. Your own expenses, try and pay for everything and invoice it back, flight itineries sent to your Ltd not client, documentation that specifically mentions nice IR35 friendly stuff that shows you not under client direction. Things like mails advising your client you will be unavailable for certain days instead of asking the client if it is ok to have a day off.

Difficult one the leave thing. Surely its common courtesy to ask if a certain date is going to prolematic rather than just tell them you wont be there? I agree doing something dull like filling in a request form is not cool.

[northernladuk]

What, even if she doesn't? That's tax evasion and HMRC will see through i right away.

Agreed. I saw in a thread the other day some guidelines about how much you can pay for bookkeeping services and common sense tells you it won't be 7k a year. Wish I had kept it. If you are going to pay her 7k make sure you can evidence every minute of it because when they come and look at you they will ask for proof. If not it is pure fraud.

People assume far too often this giving 7k a year is defacto standard with little or no comeback and it isn't.

[northernladuk]

Interesting point raised Sue Ellen, could you offer a few examples of the types of evidence that would be useful in this scenario?

Keep your own records of things you do instead of using the clients procedures. Your own expenses, try and pay for everything and invoice it back, flight itineries sent to your Ltd not client, documentation that specifically mentions nice IR35 friendly stuff that shows you not under client direction. Things like mails advising your client you will be unavailable for certain days instead of asking the client if it is ok to have a day off.

[Joxer]

4. Make sure your working practises on each contract are outside IR35 and keep evidence to prove it

Interesting point raised Sue Ellen, could you offer a few examples of the types of evidence that would be useful in this scenario?

[Alan @ BroomeAffinity]

My advice is that if you and the wife have no other income then pay a £7k salary each (say that the wife is paid for secretarial, personal assistant, bookkeeping and "research" work).

What, even if she doesn't? That's tax evasion and HMRC will see through i right away.

[Wanderer]

Last month SJD advised me to setup my limited with a 70/30 share split between myself and Mrs. Cr1spy.

As Clare says, it depends on your personal circumstances.

My advice is that if you and the wife have no other income then pay a £7k salary each (say that the wife is paid for secretarial, personal assistant, bookkeeping and "research" work) and do a 50/50 share split for dividends.

If your Mrs has an income of more than £7k then you might want to look at an uneven share split otherwise you could keep yourself below the 40% tax but she may be pushed into it because of other earnings (or vice versa).

Give the accountant a prediction of your turnover for the year, summary of other income for yourself/wife and get them to show a detailed example of what salary and dividend split they recommend, how much tax you would pay and why they are recommending that split/salary.