Did he also tell you can't trade again for 2 years or whatever the new rule is as well?
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Originally posted by northernladuk View PostDid he also tell you can't trade again for 2 years or whatever the new rule is as well?
It was one of the early approaches to avoiding historic IR35 issues. I really don't know how sensible it is...merely at clientco for the entertainmentComment
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Originally posted by northernladuk View PostDid he also tell you can't trade again for 2 years or whatever the new rule is as well?Last edited by jonnyboy; 30 November 2016, 21:52.Comment
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Originally posted by eek View PostThat only counts if you take entrepreneur's relief. I think the suggestion is to close company a and start your next contract as company B.
It was one of the early approaches to avoiding historic IR35 issues. I really don't know how sensible it is...Comment
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Originally posted by jonnyboy View PostWhat he said. I spoke to my accountant a few months back regarding my long term exit plan (winding up my company in 6-7 years and taking ER) and he said that winding up a company was not just a question of 'end trading, goodnight' - there was the wrap up of accounts, applying to HMRC for a wrap up notification, statatory noitice to any creditors and debtors, calculating tax liabilities, the actual closure, closing bank/vat/hmrc accounts, taking directors off listing, money transfers and ER processing (I know in this case ER is not part of the fiddle). My accountant said he used two specialist firms, and the current price tag was around £1200 - £1500 depending on assets in the company and generally took 4-9 months.
For an accountant closing a company (non liquidation, just strike off), there'll typically be normal statutory accounts with a trivial amount of extra work ensuring balance sheet is tidied up a bit. Yes there's VAT/employer de-registration, but again, they're modest tasks. If it's a Maslins client there's no extra "close down" charges, unless perhaps the client had only joined us a few months earlier. The strike off itself just involves a £10 cheque to Companies House.
I don't see closing/restarting companies to be a boon for accountants.
As others have said, the 2 year thing is only really to do with tax benefits of CGT upon closure. Way before ESC C16 was closed off and MVL Online existed, there would be many contractors who would close their company every few years. Not for any tax breaks on closure, but to draw a line in the sand for IR35 purposes, so realistically worst case scenario would be HMRC going back a couple of years. Sounds like this new "plan" has a similar idea. Not saying I'd recommend it (certainly not something we've suggested to clients), but if these companies aren't taking out huge sums upon closure I don't see why they need to worry about doing something completely different for two years.Comment
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