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MVL - entrepreneurs relief and starting new LTD Company

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    MVL - entrepreneurs relief and starting new LTD Company

    Apologies if this has already been covered on an earlier thread, but circumstances are slightly different.

    I am currently in the process of MVL, pre distribution, however the liquidation has started and registered.
    This was forced upon me as the current contract forced me in to an Inside IR35, thus leaving the LTD company sitting doing nothing as I am on a PAYE through umbrella.

    However I am being offered an Outside IR35 role, way after the liquidation was started. I am now concerned that if I was to take the new role, and thus needing to setup a new LTD I may go against the MVL ER.


    Will I be able to still claim the ER on the distributions, as I was forced in to Inside IR35 and a PAYE umbrella , and due to circumstances changing I am now in a position to take an Outside IR35 role.

    I appreciate thoughts and guidance.

    #2
    Not a chance, you would lose the capital treatment, unless the new trade was completely different to the old one (read: not in IT, assuming you're in IT).

    There are edge cases whereby you took a permie role for, say, a year, and then went back to contracting and that might be OK in terms of the TAAR, but your scenario is precisely why the TAAR exists

    Comment


      #3
      Incidentally, no one "forced" you to do anything. You weren't "forced" to take a capital distribution, you simply decided that you wanted to pay minimal tax.

      Comment


        #4
        Call the police on whoever forced you into this


        Sent from my iPhone using Contractor UK Forum

        Comment


          #5
          Originally posted by GhostofTarbera View Post
          Call the police on whoever forced you into this


          Sent from my iPhone using Contractor UK Forum
          At least he didn't say "illegally forced".

          OP, as others have said, this was your choice - you could have kept your Ltd company open whilst working on the inside gig, but decided to do otherwise.

          Comment


            #6
            Your bed is the continued use of your umbrella.
            "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
            - Voltaire/Benjamin Franklin/Anne Frank...

            Comment


              #7
              Originally posted by cojak View Post
              Your bed is the continued use of your umbrella.
              And in the very early days we weren't even sure if going via an umbrella company would be good enough to pass TAAR. Now we have that concern now - but you will still need to use an umbrella company for a good while before getting another limited company (going permanent and it failing to work out is an easier argument then switching to an umbrella company and then returning to a limited company again.
              merely at clientco for the entertainment

              Comment


                #8
                Originally posted by jamesbrown View Post
                Incidentally, no one "forced" you to do anything. You weren't "forced" to take a capital distribution, you simply decided that you wanted to pay minimal tax.
                Ok, When I say forced I mean it was the option between going PAYE or not having any income. The client turned the contract in to inside overnight, take it or leave it.


                What if say my wife setup the new LTD company? Noting that she is a minority shareholder in the old one and benefiting from distribution.

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                  #9
                  Originally posted by luxCon View Post
                  What if say my wife setup the new LTD company? Noting that she is a minority shareholder in the old one and benefiting from distribution.
                  No chance - HMRC "look through" such scam arrangements and would easily see that you're a controlling entity in the new Ltd. This one is as transparent as it gets.

                  Comment


                    #10
                    Originally posted by Paralytic View Post
                    No chance - HMRC "look through" such scam arrangements and would easily see that you're a controlling entity in the new Ltd. This one is as transparent as it gets.
                    I do not control my own wind in the house. HMRC can see that my wife is in total control of my life and everything I'm allowed to do.

                    Comment

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