Working in conjunction with wife

[gisajob]

I'm sitting here mulling over options for post Autumn Statement/introduction of these proposed IR35 changes.

At present I am a Ltd company contractor. I split my dividend with my wife 50/50. She has recently started a business (8 months ish) and is working as a Sole Trader currently. Her turnover is increasing month on month. Our current projections are for her to hit roughly £40k turnover for the year. Her profit margins are around 35% of turnover (so we're not talking huge money but it's a good start, and still worthwhile receiving dividend income).

Anyway, it's been in my mind that it could be worthwhile incorporating her at some point in the future. Now I am thinking could I form a group of companies and could this potentially be a workaround for these changes? If her business was generating 25% - 30% of the groups total income, could that help do you think? Could I argue that the company's income isn't entirely earned by supplying personal services?

She's currently registered for VAT but her sales don't attract VAT so her returns are always nil, with a little claimed back on expenses. I'm on the flat rate scheme.

I'm going to run things through with my account after 25th but would be interested to hear anyone's thoughts - please point out any holes (or gaping chasms!) in my idea

[northernladuk]

You are just guessing. Why not just wait a bit until we know a little more. I doubt you accountant is up to speed with it all yet so won't know so why bother them?

There are going to be hundreds of 'my dog can fetch a ball, can I put him on the company to get round the rules' questions but we won't know until it hits and the right people have digested it.

[JB3000]

I'm sitting here mulling over options for post Autumn Statement/introduction of these proposed IR35 changes.

At present I am a Ltd company contractor. I split my dividend with my wife 50/50. She has recently started a business (8 months ish) and is working as a Sole Trader currently. Her turnover is increasing month on month. Our current projections are for her to hit roughly £40k turnover for the year. Her profit margins are around 35% of turnover (so we're not talking huge money but it's a good start, and still worthwhile receiving dividend income).

Anyway, it's been in my mind that it could be worthwhile incorporating her at some point in the future. Now I am thinking could I form a group of companies and could this potentially be a workaround for these changes? If her business was generating 25% - 30% of the groups total income, could that help do you think? Could I argue that the company's income isn't entirely earned by supplying personal services?

She's currently registered for VAT but her sales don't attract VAT so her returns are always nil, with a little claimed back on expenses. I'm on the flat rate scheme.

I'm going to run things through with my account after 25th but would be interested to hear anyone's thoughts - please point out any holes (or gaping chasms!) in my idea

Wouldn't make a difference.

Your contract would be a stand alone relevant engagement for IR35 purposes and separate from her income and expenses regardless of whether or not you use same company or group.

[WordIsBond]

Your contract would be a stand alone relevant engagement for IR35 purposes and separate from her income and expenses regardless of whether or not you use same company or group.

Not necessarily.

Could I argue that the company's income isn't entirely earned by supplying personal services?

That's the part that could make a difference, depending on what they do next.

But as NLUK said, it only makes sense to wait until at least the Autumn statement to see what is going to happen.