Company in Liquidation, but going back to contracting...

[zippy.mini]

Out of interest, who did you use for the liquidation, and how much did they charge?

I am using a local company. Their charges are less than the company my accountant was going to suggest I use, but more than MVL online My accountant had no problems using whoever I wanted to use.

[zippy.mini]

IMHO the tricky thing would be convincing HMRC (if they challenged it in the first place...which in itself is fairly unlikely) that the liquidation then immediate restart was not done for tax avoidance reasons.

I know you've stated you'd planned not to contract for quite a while, and that plan changed. Have you got any kind of evidence to back that up? (NB to stress I'm not accusing you of lying...but you can imagine HMRC hear it all the time "Oh no, the fact it lead to me paying far less tax didn't cross my mind orrificer...")

The only proof I have is that I have been out of contract for 3 months and have not actively been seeking a new one. This contract found me, not the other way around.

[PorkPie]

Out of interest, who did you use for the liquidation, and how much did they charge?

[Maslins]

Hmm... that first link suggests I might be able to set up a new co. I wouldn't be transferring any assets between them and the client is different to the last contract with previous company (or at least, the Agent is different, actually the end client is technically the same). Hence being offered an unexpected new contract - they know me already and contacted me.

IMHO the tricky thing would be convincing HMRC (if they challenged it in the first place...which in itself is fairly unlikely) that the liquidation then immediate restart was not done for tax avoidance reasons.

I know you've stated you'd planned not to contract for quite a while, and that plan changed. Have you got any kind of evidence to back that up? (NB to stress I'm not accusing you of lying...but you can imagine HMRC hear it all the time "Oh no, the fact it lead to me paying far less tax didn't cross my mind orrificer...")

[zippy.mini]

If you do set up another company for this new contract, look into the "transactions in securities". Basically HMRC can remove the tax benefits you got due to the liquidation if they can successfully argue your new company is continuing the trade of the old one.

See here for our summary or here for an HMRC example.

Hmm... that first link suggests I might be able to set up a new co. I wouldn't be transferring any assets between them and the client is different to the last contract with previous company (or at least, the Agent is different, actually the end client is technically the same). Hence being offered an unexpected new contract - they know me already and contacted me.

[Maslins]

If you do set up another company for this new contract, look into the "transactions in securities". Basically HMRC can remove the tax benefits you got due to the liquidation if they can successfully argue your new company is continuing the trade of the old one.

See here for our summary or here for an HMRC example.

[zippy.mini]

And opening a new company during or very soon after liquidation of the first one can look like phoenixing so to be avoided as well.

Yes, don't really want to do that. Even though my intentions were good when I started the liquidation process

[zippy.mini]

So long as the new location you are going to be working in isn't going to be the only contract you do while working for the umbrella and you don't get caught by the 24 month rule, you can claim for travel and subsistence.

Can't guarantee that, might just be the one contract. Shouldn't go over 2 years though.

That being said, I will only spend 2ish days a week at the location, the rest I will be working from home... If I can keep it at 2 days max a week on average (i.e. 40% max of my working week), would you say that I can therefore class my home as my permanent place of work, even though the contract says otherwise?

[northernladuk]

And opening a new company during or very soon after liquidation of the first one can look like phoenixing so to be avoided as well.

[Wanderer]

I've just been reading up about Umbrella's and expenses etc and it would seem that I may not be able to claim for travel and subsistence as I won't have my own company as my permanent place of work. Which is a problem, because that reduces the take home even more, I will be travelling quite a bit and spending 1 or 2 nights away from home.

So long as the new location you are going to be working in isn't going to be the only contract you do while working for the umbrella and you don't get caught by the 24 month rule, you can claim for travel and subsistence.

[sbakoola]

whatever you do don't attempt to trade via your company as its going through the liquidation process, you will not be able to qualify for E.R. if you do.

I "think" you can go back to contracting via an umbrella company for your contract and it will not affect your liquidation or E.R. application or status; check with others on this as I am not 100% sure.

[zippy.mini]

So, after the end of my last contract, I decided I may not go back and was effectively going to retire. Maybe.

I wanted to get at the money I've been building up in my company so I decided to liquidate. I figured if I went back to contracting, I'd go through an Umbrella - I know it's less money, but it's also less hassle and no IR35 headache to worry about, which in today's climate, is getting bigger.

Trouble is, I've been offered a new contract, good enough to get me off my @rse and back working. I've just been reading up about Umbrella's and expenses etc and it would seem that I may not be able to claim for travel and subsistence as I won't have my own company as my permanent place of work. Which is a problem, because that reduces the take home even more, I will be travelling quite a bit and spending 1 or 2 nights away from home.

So, the question is, have a understood this correctly?

If I have got it wrong, great!

If I'm right, my old company is still going through the liquidation process. I assume I can't open another one and use that not? That way I can claim the expenses. The money is being taken out of the old co using Entrepreneurs Relief which I believe I can only do if I have no intention of doing the same thing again - ie I can't open another co and go contracting in the same field. Especially as the old co isn't actually liquidated yet...

I'm babbling now, but I'm confused, so I'm sorry about that! I'd better stop writing now because people will have stopped reading. I can only hope I've articulated my quandary well enough...