IR591 question

[Mordac]

Am I right in thinking that IR591 won't affect PLCs, whatever the circumstances?
If so, what are the implications of setting up an umbrella-type PLC, for contractors to 'buy into', say, thus avoiding any IR591 liabilities.
Is this practical? Can an accountant just set one up, on behalf of a group of contractors?

[Simon SJDaccountancy]

PLC

You could set up a plc - not really too difficult, nor expensive in the long run if we compare to possible tax savings, but if IR591 hits only closed companies, then your logic of a few contractors buying in would work just as well with a Private Ltd Company. That is known as a composite company, and these have been around for ages, so difficult to imagine the Govt not picking this up.

Individually you could look at setting up a plc and possibly avoiding IR591 that way - depends on cost against tax saving. The Govt could of course also include plcs within the IR591 legislation and hit those with 5 or less members.

[ChevyChase]

....

...5 family members as "directors"?

[fiddleabout]

Re: ....

It really is flying a kite to dream up solutions to a problem that is not even known yet.

All we have are rumours on what may be done. Until the actuality arrives you can't decide how to bypass it.

I could point you to some offshore schemes which would completely avoid it because they remove the need for a ltd. but there is no way that I can say they will not either be more expensive or clamped down in the budget too until we see it. Clearly Brown learned his lesson well - no years notice this time around.

Whatever happens be certain that all the companies that jumped on the IR35 bandwaggon will be peddling solutions
... and some new ones - I can smell money in this

[xoggoth]

Re: ....

Really glad I don't have a contract at moment. I did when IR35 came out in a place with lots of other contractors. We talked about IR35 all morning, ways round it, what if you did this?, what if you did that? We talked about at coffe break, we talked about it at lunch we..... aaaagh!!!

[ASB]

PLC/Close company

Simon,

Are you categorically stating that a PLC cannot (currently) be a close company ?

[silicondale]

Close company

The Inland Revenue's definition of a close company is here:-

www.inlandrevenue.gov.uk/...tapt11.htm

It makes no mention of whether the company is private (Ltd) or public (plc)

However, the IR5.91 statement said nothing about close companies. It was about "owner managers of small incorporated businesses". Anything beyond what has been publicly stated is pure supposition. I think there are actually quite a few reasons to think that the new measures won't rely on the close company definition - because this would create a whole new set of anomalies. More likely, it seems to me, that it would be more like a super-IR35, deeming market-rate salaries for all 'caught' owner-managers and imposing tax and NIC just like IR35 does. An administrative and legal nightmare - just what the R enjoy.

But that's just my own feeling, based on no evidence at all, because there isn't any. Unless of course ContractorUK can come clean on the identity and reliability of their 'source close to the Treasury' and what that source actually said.

[AtW]

Re: Close company

What are the fundamental implication of being director of a close company? I guess there will be higher scrutiny of the tax affairs? But other than that are there any restrictions that apply to close company but do not apply to non-close company?

[FamosAmos]

Re: Close company

I think you mean the other way around? A PLC (for example) has specific dates that it has to hit for accounts and different audit requirements. As a result a director of that type of company has some different responsibilities. An accountant will give you the best advice.

[silicondale]

Re: Close company - does this help ?

www.taxarticles.co.uk/clo...anies.html