Going contracting without being a director of a company

[mark271]

Hello all,

Not been in this long but dont think this is a newbie question sry if it has been asked many times. If I got a partner who created the company and was the director of the company I was just an employee of the company and got paid minimum wage PAYE and the partner got the dividends could any contract be inside IR35. The director is not working at the clients and just managing a company which has currently one contractor. Would it then matter what the working conditions are for the contractor?

Whats peoples take on doing it this way and does anyone do it.

Thanks Mark.

[chris79]

Hello all,

Not been in this long but dont think this is a newbie question sry if it has been asked many times. If I got a partner who created the company and was the director of the company I was just an employee of the company and got paid minimum wage PAYE and the partner got the dividends could any contract be inside IR35. The director is not working at the clients and just managing a company which has currently one contractor. Would it then matter what the working conditions are for the contractor?

Whats peoples take on doing it this way and does anyone do it.

Thanks Mark.

I might be wrong on this, but from what I understood the contract has to be outside IR35 or it is the company that suffers, not the individual?

Whilst this might work this year, when the income shifting laws come in next year they would probably ask you to justify paying the entire company dividend to the non-working director, etc.

Again don't quote me on these things, I've only been in the game just over a year myself.

[Alan @ BroomeAffinity]

And you'd be lucky to get a client or agency to take you on if you're not a director of the company. MSC and Transfer of Debt Provisions mean they won't take the risk.

And the Income Shifting legislation coming in next year would put yuo on shaky ground. I assume yuo mean "partner" as in spouse as opposed to "business partner"? If not, then how would you propose to be paid beyond the salary you'd get?

[philip@wellwoodhoyle]

Just two words - "Shadow Director". HMRC look at the complete structure and anyone who is not a director but is influential and has powers would be deemed to be a shadow director, meaning that for tax and Company Law purposes, they would be treated as a director. For your plan to work you would have to prove that the other director was the power and brains behind the enterprise and derived the most benefit.