is it legitimate to close ltd & use umbrella is it legitimate to close ltd & use umbrella - Page 2
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  1. #11

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    Playing devils advocate, when people close and go permie that is deemed acceptable, what difference is there between a permie and an umbrella?
    “Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

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  2. #12

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    Quote Originally Posted by SimonMac View Post
    Playing devils advocate, when people close and go permie that is deemed acceptable, what difference is there between a permie and an umbrella?
    Indeed. When engaged as an umbrella contractor, you're a permatemp, surely?
    The greatest trick the devil ever pulled was convincing the world that he didn't exist

  3. #13

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    Quote Originally Posted by SimonMac View Post
    Playing devils advocate, when people close and go permie that is deemed acceptable, what difference is there between a permie and an umbrella?
    I don't think it's been unanimously accepted that going permie in this instance would be safe (my personal view is it would be).

    I guess it could be argued that permie and umbrella were different in this situation. I accept that from the perspective of the worker, permie and umbrella are similar, and Ltd Co very different. However from the end client's perspective, a permie is an integral key part of the time, who gets a salary, employee benefits etc. An umbrella worker is a contractor, negligibly different to a Ltd Co contractor, just that they pay the invoice of a big organisation rather than multiple individuals.

    As others have suggested above, nobody's view is really any more/less valid than anyone elses. I would've thought both are quite safe (yes some might argue I'm biased...but I try not to be). I'm aware many others don't share my view.

    Disappointing that there continues to be new tax rules that are so open to interpretation.

  4. #14

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    Quote Originally Posted by LondonManc View Post
    I don't see the point of asking on here if you have had advice from a professional contracting accountancy company.
    Well, one point would be in order to hear other people's opinions (including other accountants who also sometime post here). Another might be to take the chance to ask other associated questions or to hear people's experiences or just generally chat about related matters.

    But it's an accountancy / legal forum so whatever the O/P's reason the question is on topic...

    Boo

  5. #15

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    Quote Originally Posted by dkldn View Post
    Is it legitimate to close ltd & use umbrella so that to cash out the lump sum on ltd company bank account?
    I am also trying to establish whether it would be ok to close a Limited Co using an MVL and claim Entrepreneurs Relief but then work on a PAYE basis through an umbrella company.

    It all seems to be a grey area. Do we have any updated advice on this?

    Many Thanks in advance.

  6. #16

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    Quote Originally Posted by NickX View Post
    I am also trying to establish whether it would be ok to close a Limited Co using an MVL and claim Entrepreneurs Relief but then work on a PAYE basis through an umbrella company.

    It all seems to be a grey area. Do we have any updated advice on this?

    Many Thanks in advance.
    One update to my post from ~16 months ago is that since then HMRC did basically clarify that someone going permie would be safe. I would have thought umbrella was safe too...but as you can see from earlier in this thread, the rules are indeed grey and not everyone agrees how they'd be interpreted.

  7. #17

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    Quote Originally Posted by Maslins View Post
    One update to my post from ~16 months ago is that since then HMRC did basically clarify that someone going permie would be safe. I would have thought umbrella was safe too...but as you can see from earlier in this thread, the rules are indeed grey and not everyone agrees how they'd be interpreted.
    Thanks very much for the reply. That is fairly positive, but I agree that there is still likely to be some variations on how the rule is interpreted.

  8. #18

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    Default Tax expert advice on subject

    I am also trying to establish whether it would be ok to close a Limited Co using an MVL and claim Entrepreneurs Relief but then work on a PAYE basis through an umbrella company.

    I’m sure you can do this BUT will Hmrc come after you to pay additional tax 35% on top of the 10% ER tax paid on the funds you released from your ltd company?

    It all seems to be a grey area. Do we have any updated advice on this?

    Many Thanks in advance.

  9. #19

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    Don't forget you've stuffed your long terms plans if you close the company and benefit form a sweet tax deal. You can't Re open another within 2 years so if the inside gig goes tits up in 2 months you are stuck with brolly even if the next gig is outside.

    We've at least one example of this happening already.
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  10. #20

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    Quote Originally Posted by Jgltd View Post
    I am also trying to establish whether it would be ok to close a Limited Co using an MVL and claim Entrepreneurs Relief but then work on a PAYE basis through an umbrella company.

    I’m sure you can do this BUT will Hmrc come after you to pay additional tax 35% on top of the 10% ER tax paid on the funds you released from your ltd company?

    It all seems to be a grey area. Do we have any updated advice on this?

    Many Thanks in advance.
    It's not grey. Yes you can.
    As NLUK says, you do potentially limit your future options though.
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