IR35 for Ltd company with 2 shareholders

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fotistso replied

22 February 2017, 12:26
understood. thanks for clarifying
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sal replied

22 February 2017, 12:23
All the income from PSB IR35 inside contract will be net after taxes. If it's the Private sector the whole income is treated as personal income for the contractor, but you have to pay all the PAYE/NI. In both cases the remaining net monies should be passed on to you personal bank account in full. All of this is effectively an expense for YourCo.

Unless YourCo has other sources of income it will run loss, meaning no profits will be available for distribution as dividends. Both shareholders are still "entitled" to receive dividends, there just isn't any to be distributed.

Last edited by sal; 22 February 2017, 12:26.
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fotistso started a topic IR35 for Ltd company with 2 shareholders

22 February 2017, 11:18
IR35 for Ltd company with 2 shareholders

Hi all,

I haven't managed yet to get a definite answer to my question so I was wondering if anyone can help from their own experience.

If you have a Ltd company with 2 shareholders (spouses) and you take on a contract that falls within IR35, what happens with the 2nd shareholder and their dividends entitlement?
When you are outside of IR35 you split the profit based on the % of shares that each one holds. If you are inside of IR35 can you still distribute dividends to the second shareholder equivalent to their shares and take your own part of dividends as salary?
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