Entrepreneurs' relief Entrepreneurs' relief
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  1. #1

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    Default Entrepreneurs' relief

    Hi All

    I went down the Entrepreneurs' relief route in April this year, my understanding is that I can not operate under a limited company for a 2 year period unless I'm prepared to forfeit the reduced tax allowance.

    A couple of questions:
    Can I work as an employee under my wife's limited company
    Does it make commercial sense to go down this route?

    Thanks in advance

  2. #2

    More time posting than coding


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    No. Unless the work is completely different to what you were doing in the now-closed company. You could however work as an employee for a completely independent company in which you had no ownership, direct or indirect.

  3. #3

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    Surely there is no advantage being an employee with her? The full income will be taxed like it would with a brolly so what's the point?

    If you are thinking of becoming a shareholder of her company paying divis etc then no as you'll be continuing in the same way you were before.

    Agents often want the contractor to be the majority shareholder, often the only one, so you will struggle with that regardless of the tax situation.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  4. #4

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    Quote Originally Posted by Bobo View Post
    Hi All

    I went down the Entrepreneurs' relief route in April this year, my understanding is that I can not operate under a limited company for a 2 year period unless I'm prepared to forfeit the reduced tax allowance.

    A couple of questions:
    Can I work as an employee under my wife's limited company
    Does it make commercial sense to go down this route?

    Thanks in advance
    Depends on why you closed the company, the 2 year rule isn't the only criteria to be met to forfeit the capital treatment. It may be possible to return but you would need professional advice to analyse your situation especially if there is a large amount of tax on the line. You shouldn't rely on an answer on here for something that could be very important.

    Martin
    Contratax Limited

  5. #5

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    Thanks Everyone.

  6. #6

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    ChimpMaster's Avatar
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    Better off just working under a PAYE umbrella, assuming the point is that you want to return to contracting.

  7. #7

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    Quote Originally Posted by northernladuk View Post
    Agents often want the contractor to be the majority shareholder, often the only one, so you will struggle with that regardless of the tax situation.
    My PSC is 50/50 split with my wife, and I've never had any issues or even questions from agencies regarding that.

  8. #8

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    Old Greg's Avatar
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    Quote Originally Posted by Paralytic View Post
    My PSC is 50/50 split with my wife, and I've never had any issues or even questions from agencies regarding that.
    Agreed. IIRC occasionally agents want the contractor to be sole director.
    Quote Originally Posted by Bean
    I admit that I'm a lazy lying cretin, but so what?
    25 June 2018

  9. #9

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    Please advise WHY you closed the company so we can help further.

    It isn't as simple as saying - oh you closed down via MVL, no more contracting for 2 years.

  10. #10

    Nervous Newbie


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    Slight hijack (apologies) but hopefully relevant

    I'm currently contracting through my own ltd (no wife involvement), if determined caught by IR35 in April I plan to go permie and close the company (and was hoping to take the retained profits as capital with ER)

    If I wanted to work "on the side" using a ltd (own projects, not contracting), would that be possible using a new company without forfeiting the ER? I'd already be a higher rate taxpayer in the permie job (hopefully!) so would just plan on taking irregular dividends. How about if it was the wife's company?

    I can find plenty on the web about qualifying for the relief, but not much about this two year rule after you've done it

    Thanks!

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