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Tax free redundancy prior to MVL

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    #11
    Originally posted by SueEllen View Post
    Directory? As in telephone?
    Lol.. Nice to see you back and in good form SE.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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      #12
      I don't think it's as clear cut as you think @Northernladuk.

      HMRC appealed against director of company who paid redundancy, despite not taking salary in last two years.

      Yes, other accountants are available. Mine "advises not to do it unless HMRC have signed off on it" - not because there's anything intrinsically illegal about it - but if Hector comes a-knocking he doesn't give two sh1ts whether it's legal - he's only interested in if he can bully you into submission.

      You get inspector A, who's a government monkey, no problem. Inspector B, who's a government monkey, big problem. Inspector C could be like inspector A, but his wife is shagging someone else because she can't respect the fact he's a government lackey - so big problem.

      Effectively - the accountant is saying "don't do it if you don't want the years of hassle and cost a potential inspection could cause you if Hector comes along and he's in a pissy mood, the inconsistent and incompetent ******"...


      And we all pretty much know that's how it works.

      Comment


        #13
        It is clear cut. There are two tests. One is a contract of employment and the other is you deciding to close the company.

        That case is anything but clear. She had a contract of employment for a start and secondly didn't pay herself for 2 years while trying to keep her company afloat. Try find me a contractor in that position. We don't have contracts of employments, will have been paying ourselves up to the last minute and are bringing in 100k a year and the decision to close is to go inside, not going bust. Nothing about that reflects our situation.
        Last edited by Contractor UK; 28 June 2020, 15:39.
        'CUK forum personality of 2011 - Winner - Yes really!!!!

        Comment


          #14
          This is weird, aren't you an employee of the company, director or not? Should I just make someone else director then become an employee of the company that has 6 years redundancy pay coming? People transfer jobs within the same company all the time.

          What about Zero hours contracts? Don't they get redundancy?

          Zero hour employees have greater employment rights, including redundancy pay, maternity leave, and protection against unfair dismissal.

          Also:

          You’ll get statutory redundancy pay if you:

          have been employed by your employer for 2 years continuously

          have lost your job because there was a genuine need to make redundancies in your workplace

          are a particular kind of worker called an ‘employee’ - this includes part-time employees



          I think most of use tick all of the boxes. As a part time employee on the minimum wage you would definately get £800 to £1000 salary per month.


          The first thing I did after creating my company was to complete and sign a contract of employment. Everyone should have one... I am sure if you look hard enough you'll find your contract from when the company started trading.

          What if the company has multiple directors or assigns a new director, that means only one of them must stay behind to trade, everyone else can be made redundant. Also most permanent jobs wont keep track of how many hours you do a work a week, just what hours your are contracted to do. Pem work overtime is unpaid. So you can easily have a contract for 20 hours a week but do 40. Not sure that HMRC can prove how many hours a week you have worked, not unless they have a tracker up your ass.

          A part-time worker is someone who works fewer hours than a full-time worker. There's no specific number of hours that makes someone full or part-time, but a full-time worker will usually work 35 hours or more a week

          I think we just need a decent contract of employement.
          Last edited by Drei; 11 March 2020, 01:07.

          Comment


            #15
            No you are not. You are an office holder of the company and not an employee. To be an employee you need a contract of employment with the company. That also means you have to adhere to certain laws including NMW which means you won't be able to pay yourself as tax efficiently as we do.

            If it were as clear cut as you say we'd all have one and it would be in the guides and part of accountants standard set up procedures... And it isnt which speaks volumes. So everyone doesn't have one ans doesn't matter how far back you go. Unless you purposely asked to become and employee of your company you won't have one.

            And then there is the genuine need to close the company. That very rarely happens to us. We do because we chose to, not because it becomes insolvent.
            Last edited by Contractor UK; 28 June 2020, 15:39.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #16
              Originally posted by northernladuk View Post
              It is clear cut. There are two tests. One is a contract of employment and the other is you deciding to close the company.


              That case is anything but clear. She had a contract of employment for a start and secondly didn't pay herself for 2 years while trying to keep her company afloat. Try find me a contractor in that position. We don't have contracts of employments, will have been paying ourselves up to the last minute and are bringing in 100k a year and the decision to close is to go inside, not going bust. Nothing about that reflects our situation.

              This is weird, aren't you an employee of the company, director or not? Should I just make someone else director then become an employee of the company that has 6 years redundancy pay coming? People transfer jobs within the same company all the time.

              What about Zero hours contracts? Don't they get redundancy?

              Zero hour employees have greater employment rights, including redundancy pay, maternity leave, and protection against unfair dismissal.

              Also:

              You’ll get statutory redundancy pay if you:

              have been employed by your employer for 2 years continuously

              have lost your job because there was a genuine need to make redundancies in your workplace

              are a particular kind of worker called an ‘employee’ - this includes part-time employees



              I think most of use tick all of the boxes. As a part time employee on the minimum wage you would definitely get £800 to £1000 salary per month.


              The first thing I did after creating my company was to complete and sign a contract of employment. Everyone should have one... I am sure if you look hard enough you'll find your contract from when the company started trading.

              What if the company has multiple directors or assigns a new director, that means only one of them must stay behind to trade, everyone else can be made redundant. Also most permanent jobs wont keep track of how many hours you do a work a week, just what hours your are contracted to do. Pem work overtime is unpaid. So you can easily have a contract for 20 hours a week but do 40. Not sure that HMRC can prove how many hours a week you have worked, not unless they have a tracker up your ass.

              A part-time worker is someone who works fewer hours than a full-time worker. There's no specific number of hours that makes someone full or part-time, but a full-time worker will usually work 35 hours or more a week

              I think we just need a decent contract of employment.


              Also, no we didn't chose to cease trading, our business model was directly attacked and we cannot get clients, therefore making a loss, therefore forced to let go of staff... and eventually closing down the company. HMRC has attacked all Freelancers no matter if I work from my garden or a client office. HMRC scared off all possible clients, hence the blanket IR35 by most organisations.

              Let's not forget that the US treats all their people as self employed, hence why everyone has to do a tax return at the end of the year.


              What the F does IR35 mean anyhow? Inland Revenue 35th tulipty Rule?
              Last edited by Contractor UK; 28 June 2020, 15:40.

              Comment


                #17
                Erm.. Right...

                Not sure why you duplicated most of that but anyway..

                Closing your company because HMRC changes the tax legislation still isn't being forced out of business or it making a loss. There are still outside gigs out there to go for. The company just isn't needed so should close without redundancy.

                What does what they do in the US have to do with anything? Tribes in Borneo throw themselves of a platform with only a vine tied to the penis stopping them hitting the ground. Do we need to consider that as well?
                Last edited by northernladuk; 11 March 2020, 01:27.
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #18
                  @Northernladuk: "You are an office holder of the company and not an employee"

                  That legal case I quoted - the judge specifically states that there's absolutely zero reason why you can't be BOTH an "office holder" and an "employee".


                  On your second point about choosing to close the company. You could easily argue that due to a change in the law a significant proportion of contractors have been forced out onto a job market trying to find outside IR35 roles at the same time.

                  If you can't find a contract - or at least not one within reasonable travelling distance - because there's a billion contractors on the market then you're *forced* to make a commercial decision as your company can no longer support it's staff.

                  Comment


                    #19
                    Originally posted by ChevyChase View Post
                    @Northernladuk: "You are an office holder of the company and not an employee"

                    That legal case I quoted - the judge specifically states that there's absolutely zero reason why you can't be BOTH an "office holder" and an "employee".


                    On your second point about choosing to close the company. You could easily argue that due to a change in the law a significant proportion of contractors have been forced out onto a job market trying to find outside IR35 roles at the same time.

                    If you can't find a contract - or at least not one within reasonable travelling distance - that makes up the shortfall because there's a billion contractors on the market then you're *forced* to make a commercial decision as your company can no longer support it's staff.
                    You can but you need a contract of employment and adhere to employee legislation which includes paying yourself inefficiently.

                    I don't agree and we will have to leave it there until someone better qualified than me can comment.
                    Last edited by northernladuk; 11 March 2020, 01:39.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment


                      #20
                      Originally posted by northernladuk View Post
                      You can but you need a contract of employment and adhere to employee legislation which includes paying yourself inefficiently.

                      I don't agree and we will have to leave it there until someone better qualified than me can comment.
                      Income Tax (Earnings and Pensions) Act 2003

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