Wife starting contract, use my LTD company or start new one?

[Craig at Nixon Williams]

I don't see how having another contractor working for the company would affect IR35 - you could both be working through the same company under separate with different end clients and one be caught by IR35 and the other not, it is the contract and working practices which determine this.

If you can't send a substitute then having your spouse involved wouldn't make a diference, likewise if you can send a substitute and your spouse has a completely different set of skills then would you send them to do your job for the day just because they were a contractor?

If you both have high incomes and are using the Flat Rate Scheme for VAT then two companies may be the best way to go so that you can both benefit from the scheme, if not then that isn't an issue.

As a few people have mentioned here, using the same company will save you on accountancy fees and insurance which would obviously benefit both of you.


Hope this helps!
Craig

[SueEllen]

Doesn't matter what the relation to the sub is. A sub is a sub be it a member of the same company or an outside company. I don't think it matters a jot in an instance such as this. HMRC are not stupid and one look to see that they are both in separate contracts virtually the whole time will be enough to ruin the pooling argument.

I had a client who had a husband and wife team subbing for each other all the time and they also had another contract. We were allowed to sub but it was more difficult as in we had to introduce the sub to the client and a few checks had to be done on them. There as they just introduced themselves as a team from the beginning.

I've worked with other clients were contractors worked with a sibling or a parent, and they had a similar arrangement. The client knew the other party from the beginning and the work was done by two people.

The fact that the company is now clearly a family business even if both are in contract means as long as they both take care on how their contracts are written, introduce the other person to the client at the beginning as someone who will be doing some of the work and actually does it[, makes it harder for HMRC to argue that IR35 applies to the individual contractors.

So if the personal finances are in a pot anyway the company finances may as well be. However conduct yourselves as a team in front of clients rather than as individual contractors.

If they are separate then have separate companies.

[northernladuk]

are you a contractor or an IR35 expert? The key of IR35 is that everything matters but nothing is sufficient in itself. Have you ever read the lR35 text?

Indeed but you have to take a pragmatic approach. They will pull sham situations or unrealistic arguments apart. A sub is a sub, whether it be your wife in the same company, your wife in a different company or a stranger in a different company. Pretending you are a mini consultancy and your wife can sub you when she herself is on full time contract will not make any difference whatsoever.

You are correct in what you say but kidding yourself over situations you think are valid because you are too close to them doesn't help either way.

[AnthonyQuinn]

Doesn't matter what the relation to the sub is. A sub is a sub be it a member of the same company or an outside company. I don't think it matters a jot in an instance such as this. HMRC are not stupid and one look to see that they are both in separate contracts virtually the whole time will be enough to ruin the pooling argument.

are you a contractor or an IR35 expert? The key of IR35 is that everything matters but nothing is sufficient in itself. Have you ever read the lR35 text?

[northernladuk]

Husband and wife work as a family business, sharing the work load and effectively subcontracting work to one another. HMRC try to IR35 investigate it and the couple's defence is that it's a family business, innit, and they are using their right of substitution all the time by pooling their resources to work on each other's contracts. It's difficult for HMRC to prove otherwise because the husband fonts up his contracts and the wife fronts up hers so the clients only see one person but behind the scenes the work is shared.

Doesn't matter what the relation to the sub is. A sub is a sub be it a member of the same company or an outside company. I don't think it matters a jot in an instance such as this. HMRC are not stupid and one look to see that they are both in separate contracts virtually the whole time will be enough to ruin the pooling argument.

[MikeB]

thanks for all that, appreciate the advice.

[Wanderer]

Personally, I would stick with one company because there is a potential saving of around £1500 in insurance and accountant's fees not to mention the reduced admin overhead.

How on earth does it help with IR35 sub ability? Surely her availability is the key, not the company structure. Doesn't matter what company your sub works for, you still front it up to the client whatever so don't think this is a consideration point at all.

Husband and wife work as a family business, sharing the work load and effectively subcontracting work to one another. HMRC try to IR35 investigate it and the couple's defence is that it's a family business, innit, and they are using their right of substitution all the time by pooling their resources to work on each other's contracts. It's difficult for HMRC to prove otherwise because the husband fonts up his contracts and the wife fronts up hers so the clients only see one person but behind the scenes the work is shared.

Start a new one IMO. Keep yours and her affairs separate IMO. Can be a very expensive deal when (and it does) go wrong. Also having shares between you can become complicated if one or the other of you isn't in contract for a long time. Business and pleasure and all that. Couple of 100 quid saving on insurances isn't wroth it IMO.

Depends on the couple's relationship. Some like to keep their finances as "his" and "hers" while others are happy to think of themselves as fully connected. Each to their own.

[Platypus]

Couple of 100 quid saving on insurances isn't wroth it IMO.

But a couple of grand for another set of accounts?

Use the same company I say. Assume your marriage will last and put everything into a shared pot.

I also think that a company with 2 fee-earning employees looks better for IR35. More like a proper consultancy.

Just my opinion. Based on no facts whatsoever. Take it or leave it!

[northernladuk]

1. use your own company.
helps with IR35 with subsitution ability
less paperwork
less insurance costs
can help you grow to a small boutique consulting

2. Separete companies
might help keep both below the fixed VAT threshold
can pay dividends to one of you and not the other

How on earth does it help with IR35 sub ability? Surely her availability is the key, not the company structure. Doesn't matter what company your sub works for, you still front it up to the client whatever so don't think this is a consideration point at all.

Start a new one IMO. Keep yours and her affairs separate IMO. Can be a very expensive deal when (and it does) go wrong. Also having shares between you can become complicated if one or the other of you isn't in contract for a long time. Business and pleasure and all that. Couple of 100 quid saving on insurances isn't wroth it IMO.

[AnthonyQuinn]

1. use your own company.
helps with IR35 with subsitution ability
less paperwork
less insurance costs
can help you grow to a small boutique consulting

2. Separete companies
might help keep both below the fixed VAT threshold
can pay dividends to one of you and not the other

Hi,
I've been contracting in the UK for a number of years through a LTD company. If my wife was also to start contracting in the UK, does anyone have any advice on the pros/cons of either running this through my existing company or starting a new LTD company?

Thanks,

Mike

[MikeB]

Hi,
I've been contracting in the UK for a number of years through a LTD company. If my wife was also to start contracting in the UK, does anyone have any advice on the pros/cons of either running this through my existing company or starting a new LTD company?

Thanks,

Mike