Using my wife's contracting company Using my wife's contracting company
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  1. #1

    Nervous Newbie


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    Default Using my wife's contracting company

    Hi everyone!

    My wife has been contracting for about 5 years now through her own limited company. I've helped her out with the admin, but the whole thing is in her name and she's the only person to ever take salary or dividends from the company. At this point it's all but dormant as the IR35 thing means she hasn't worked since last year.

    I may have a potential small business contracting opportunity and I wondered what the situation would be with me using her company for it. Can she just employ me and pay me a salary? For me to take a dividend she'd presumably have to give me some shares. Is it ok for her to be taking a dividend from the company where the income was generated by my work? Any other implications, like needing different indemnity insurance to cover extra employees?

    Any thoughts on any of the above would be very gratefully received. Thanks!

  2. #2

    Fingers like lightning


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    <nluk mode activated>

    What does your accountant say?

    </nluk mode>


    More helpful answer: in theory yes, this should be possible but some agents/clients might have an issue with you not being a director or 50% owner in the Ltd company. Have you asked them about that?

    Is your wife's company SIC code correct for the work being done?

    It is fine for dividends to be shared between two people when only one is providing the revenue at any one point in time. Gifting shares should be possible, but if her company has significant funds, check whether this is strictly allowed.

    You'll have to check the existing insurances, to see whether they would need updated.

    However, unless its is completely not economically viable, or time is of the essence, I'd recommend just setting up your own ltd company - it can be done quickly.

    But, speak to your (or your wife's) accountant too.
    Last edited by Paralytic; 26th March 2020 at 09:50.

  3. #3

    Godlike

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    Depending on the value of the contract and how long it is likely to last, you could consider an umbrella too?

  4. #4

    My post count is Majestic

    northernladuk's Avatar
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    Deffo get her to speak to her accountant. Might be better options depending on the values you are talking about.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

  5. #5

    Fingers like lightning


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    Quote Originally Posted by Paralytic View Post
    It is fine for dividends to be shared between two people when only one is providing the revenue at any one point in time. Gifting shares should be possible, but if her company has significant funds, check whether this is strictly allowed.
    I would advise that there are certain risks to income shifting doing this. Whole can of worms.

    As other's have said, depends on contract length and value. Depending on your IR35 status, I'd say go brolly or start a new company and perhaps have your wife as a shareholder on there too depending on her personal income and tax position.

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