Moving from contracting to perm and closing company question

[rootsnall]

Thanks. Ive been trying to talk to my accountant, but getting zero replies recently (It is a large faceless accountancy firm, not a small, local one). I want to find out exactly how much I'd be liable for, should the worst happen.

One other thing: Any suggestions regarding making the company dormant or closing it entirely?

Work out how much NI you have avoided due to using a Ltd, ( so approx 25% of the dividends you have paid ), it's that plus possible penalties. I would close the Ltd if it was me. If you go via the < £25K route it's quick and pretty easy, your accountant will probably charge you a few hundred to prepare final accounts and produce a few letters to shut down PAYE, VAT etc. The big plus for that route is that it is your Ltd that owes the money, not you, if you lost an IR35 case. But it would be no more. They can chase you personally if you have been 'negligent' but as far as I am aware this has not happened. If you have had contract reviews etc then I guess that would help. I just closed a Ltd. Disclaimer - I have learnt most of this on here

[BlueThunder]

Out of interest, if I took a permanent job at a completely unrelated company for say 6 months, and then went to the company I was going to join, would that make a difference? I'm just wondering what would break the "disguised employee" argument. (Other than doing a completely different role in the same company)

[Peoplesoft bloke]

If you close it immediately and go perm you can't go contracting via a LTD for 2 years again.

Isn't that only if you're using Entrepreneur's Relief?
Pretty sure it won't apply if the remaining funds are paid as dividends.

[northernladuk]

Isn't that only if you're using Entrepreneur's Relief?
Pretty sure it won't apply if the remaining funds are paid as dividends.

Yep.

[hairymouse]

Take the permie job if it makes sense moving forward. ie. can you find work elsewhere ? If it was me I wouldn't let the IR35 issues cloud your judgement. It sounds like your chances of getting investigated and ultimately having to cough up are slim, and even if you did the money you have earned via the permie job would mitigate that. The 25K bit is to do with how you close your Ltd Co. The less than £25K route is easier and cheaper, talk to your accountant.

There's a good chance you could be on the bench for 6 months or more if you don't take the permie job. That will eat about 40 k of warchest. That's why I agree with the above, comparing the risk of HMRC doing their worst (slim possibility) with sitting on the bench and losing 40k (real possibility, happened to me).