Closing company and going umbrella with same end client Closing company and going umbrella with same end client
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  1. #1

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    Default Closing company and going umbrella with same end client

    Hi,

    I have a quick question about going via an umbrella company.

    I am currently working through my own Ltd and operating outside IR35. I've built up a sizeable amount in the company so would like to liquidate the company and extract the money.

    I'm expecting an extension to my contract to be offered next month, so I am thinking about going through an umbrella for 6-12 months whilst I close the company down. Even though I'm working for the same end client, this wouldn't cause me any issues with phoenixing as I'm not working through my own Ltd would it? After I've closed the company and got the money out I would either continue through an umbrella or go perm but have no plans to operate through a Ltd again either in the short or long term.

    Thanks

  2. #2

    More time posting than coding


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    No issue with phoenixing. There may be a risk of HMRC looking at people going from outside to umbrella at the same client in terms of previous status decisions. My view is that that risk is probably low compared to, say, going from outside to inside IR35 at the same client, but nobody knows for sure.

  3. #3

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    Quote Originally Posted by Amanensia View Post
    There may be a risk of HMRC looking at people going from outside to umbrella at the same client in terms of previous status decisions.
    Thanks for the reply, I did also think about that. But would they know Im at the same client? If I go umbrella then wouldn't my employers number/ID change as it's currently my Ltd co? So for all they know I've just gone permy?

  4. #4

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    Default Similar situation with client

    Hi, I have in a similar position, i.e. outside IR35 via limited. And soon will need to switch to umbrella or PAYE if I want to stay with the client. However, I would like to return to limited if possible if/when the off-payroll changes have calmed down. Do I have to wait 3 years if I shut the company down and extract funds before I can be a director again? Thanks, Jake

  5. #5

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    Quote Originally Posted by jdt View Post
    Hi, I have in a similar position, i.e. outside IR35 via limited. And soon will need to switch to umbrella or PAYE if I want to stay with the client. However, I would like to return to limited if possible if/when the off-payroll changes have calmed down. Do I have to wait 3 years if I shut the company down and extract funds before I can be a director again? Thanks, Jake
    No you can be a director whenever you like.

  6. #6

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    Quote Originally Posted by jdt View Post
    Hi, I have in a similar position, i.e. outside IR35 via limited. And soon will need to switch to umbrella or PAYE if I want to stay with the client. However, I would like to return to limited if possible if/when the off-payroll changes have calmed down. Do I have to wait 3 years if I shut the company down and extract funds before I can be a director again? Thanks, Jake
    If you’re taking the company reserves as capital via an MVL then you can’t set up a new Ltd for a similar business for two years after the capital distribution. If you do, the capital is liable to be reclassified as income.

  7. #7

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    Quote Originally Posted by Amanensia View Post
    If you’re taking the company reserves as capital via an MVL then you can’t set up a new Ltd for a similar business for two years after the capital distribution. If you do, the capital is liable to be reclassified as income.
    If i get my company funds below £25K by putting a lump sum into my pension and then take the rest as dividends, can I close the company without having to go through an MVL, and if so can I then start a new company 12 or 18 months later without any issues?
    • The meaning of life is to give life meaning
    • Worrying about tomorrow spoils today

  8. #8

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    Quote Originally Posted by DannyF1966 View Post
    If i get my company funds below £25K by putting a lump sum into my pension and then take the rest as dividends, can I close the company without having to go through an MVL, and if so can I then start a new company 12 or 18 months later without any issues?
    If you do not receive the tax benefit of a capital distribution but instead take your profits as income (e.g. dividends) then you do not need to worry about the TAAR "2 year" rule.

  9. #9

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    Quote Originally Posted by TheCyclingProgrammer View Post
    If you do not receive the tax benefit of a capital distribution but instead take your profits as income (e.g. dividends) then you do not need to worry about the TAAR "2 year" rule.
    You also don't need to worry about it if you take the < £25k as a capital distribution.

    Dunno why you would worry about getting reserves down to less than £25k if you are just going to take dividends though? Seems a strange thought process.

  10. #10

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    Don’t forget your £30K tax free redundancy pay 1st




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