Close ltd company or no?

[ITbanker]

Hi All

After some advice pleas, I have been with my current contract for a year working through ltd company. I had the role assessed by QDOS and it was outside IR35.
The client has asked me to take up a new contract on a new programme next year, however they are no longer using any ltd company contractors, if i want to accept i have to go via umbrella .. the role hasn't been assessed as outside or inside, they are simply taking away the risk from themselves by only using Umbrella contractors

Anyway as the market isn't great at the moment and i am the sole earner in my household I don't want to risk not having a contract for a while so will take it.. My question is what do i do with my limited company? I am hoping once the market settles i will start to look for roles outside ir35 but that might not be for a year or so.. I have around 160K in my company account.

I see my options as

1) MVL - I'm discounting this as although financially it would be the best option, it means i cant take an outside IR35 role again for 2 years

2) Make company dormant - With this option i would have to close my account I guess and take all the money as income? is that right?

3) Close down the company - again i would have to take the money out as income right?


Do i have any other options? What would people recommend in this scenario?

Thankyou in advance

[Amanensia]

Why do anything? Just leave the company as-is, stop paying yourself salary/dividends while you're earning through the umbrella (although you could top up your earnings via dividends if you need to) and then everything's ready to go when you want to take a contract again. You might be able to save on some accountancy fees while not trading but frankly I'd probably not even bother doing that.

However it's worth thinking about whether you really think it's likely you'll need the company in the next couple of years. If not, you've got a great opportunity to get the cash out as capital before ER gets reformed, as looks likely in the not too distant future. And if you do get a contract in the meantime you can always put it through an umbrella for a little while and probably still end up ahead due to the MVL/ER (or at least not too far behind.)

[Maslins]

However it's worth thinking about whether you really think it's likely you'll need the company in the next couple of years. If not, you've got a great opportunity to get the cash out as capital before ER gets reformed, as looks likely in the not too distant future. And if you do get a contract in the meantime you can always put it through an umbrella for a little while and probably still end up ahead due to the MVL/ER (or at least not too far behind.)

People may say I'm biased, but I'd suggest the above.

[Paralytic]

Depending on where you are in life, and whether you need the company funds to live on, consider pension contributions. You can pay in £40K in this year, and £40K for each of the previous 3 years, assuming you've had a pension active during those years.

Such payments can also reduce your Corporation Tax for this year and also potentially allow you to claim back/offset CT from last year.

Speak to your accountant who will be able to work out the specifics for you.