Reply to: Two Person Ltd - one half mainly focused on public sector - one not

[northernladuk]

Surely your accountant is your first stop for a question like this?

[b r]

tbh We've opted out of the problem, my OH has taken a perm role (with one of the big service companies who'll no doubt be now mopping up the work contractors use to do), decent offer though and local.

[happy22]

My first post so go easy on me.

I am in the same position too with my wife about to take a public sector role

I don't see any reason why you can't operate public sector and non-public sector contracts using the same limited company. The corporation tax etc can be sorted out

The only problem I can see is if you have a 50/50 share split like we do (where you would ideally do low salary/high dividend for both directors) then you are a bit stuffed in allocating dividends as one director is being forced to take a very high salary and dividends obviously need to be equal.

If my wife puts most of her post tax invoice value into a pension whilst in the public sector will this work? I realise that this will have to be done personally so you won't be able to claw back the NI. But this should at least get her salary down.

I don't really want to change the share structure yet as this may only be a 3 months public sector contract and we may never do public sector again (hopefully!)

[Unseen]

Any update on this setup as I'm in the same situation. 2 contractors under one limited company, one public sector, other private sector. I asked accountants but their answer was to wait for update from agency and client. So everyone wait for someone else and not giving any definitive answers.

[b r]

I'm just asking because of the way he uses italics rather than quote. Never see it before and we've got 2 people doing it at the moment.

No, just how I've always done it on another (non-work) forum. First contracting in 2003, with a break 2004-2008 while a c-level perm, mostly private sector. OH contracting since 2006, public sector the last 3 years.

Agent to lazy and cheap to pay for proper advice?

Nope, also asking our Accountants the same question, just like to see answers from multiple sources.

[SueEllen]

I'm just asking because of the way he uses italics rather than quote. Never see it before and we've got 2 people doing it at the moment.

Agent to lazy and cheap to pay for proper advice?

[northernladuk]

Harsh.

I'm just asking because of the way he uses italics rather than quote. Never see it before and we've got 2 people doing it at the moment.

[SueEllen]

Are you the same guy that's on a zero hours contract?

Harsh.

[northernladuk]

Are you the same guy that's on a zero hours contract?

[b r]

How you run your payroll and dividends is your business.

Yes I know, but that's because we get 100% of the invoice and the full VAT so we can, in future I can't see anyone can work both in and out within the same Limited business in the same tax year (not business year).

Some of us consider that we're in business (same company since 2001, numerous clients, multiple fee earners) not just avoiding tax :-)

[northernladuk]

How you run your payroll and dividends is your business. Your situation is going to be more complicated with how you distribute your money but shouldn't mean you have to change your setup as far as I can see. It might be better for one person to go brolly or something but I don't see anything forcing you to change.

[b r]

The agency will deduct PAYE and NIC's based on that persons tax code

Hmm. Currently we're both fee earners and pay ourselves the same value (salary and dividend) irrelevant what "we've" earned.

We do this as it covers when one of is worked and the other isn't etc, expenses are paid depending on what we've spent individually.

But in the future this won't be possible, so does that mean that you can only be a one-person PSC from April if anyone (fee earner) has a contact with the Public Sector?

[northernladuk]

Followed by the conclusion that it isn't necessarily true.

Indeed but this is a very different case. In that link someone is trying to prove they are, which looks like it was a long difficult case. I don't think that has any reflection on the standard status. There are cases where contractors have successfully argued they are permies. Does that mean we are all permies?

As standard we are directors and have no employment contract and are not bound by NMW etc so not employees.

https://www.gov.uk/employment-status/director

[Dylan]

But surely in the third or so paragraph..

It is an established principle that directors are not automatically employees,

Followed by the conclusion that it isn't necessarily true.

[northernladuk]

Employment status: director and shareholder was an employee | Personnel Today

But surely in the third or so paragraph..

It is an established principle that directors are not automatically employees,