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Post Info TOPIC: Director & subcontractor in same company ?!


Newbie

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Director & subcontractor in same company ?!


Can someone help offer an insight?

I have a friend who has been working as a sole trader providing videography services.

He has now set up a Ltd company with a partner and is a director in this new company providing the same services.

He was advised by some business guru to invoice himself as a sole trader from the Ltd for work undertaken, effectively as a subbie, as opposed to drawing money through dividends or salary.

I can't work out why or how this would be beneficial and I feel like IR35 would definitely come into play.



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Master Book-keeper

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Hi Jason

So hows about an intro before we start. We always ask newbies! Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, who is your MLR with, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? That sort of thing. Helps get to know you but also how best to pitch answers.

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Newbie

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New to this so bare with me!
So I'm a member of the AAT employed as an accountant and based near Bristol. I've been working in practice for nearly 5 years now and currently working for a new firm having started earlier this year, previously to that I was at a top 15 firm where I spent 4 & half years. Not currently studying but looking at ATT to improve my tax knowledge. Think that covers most things!

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Master Book-keeper

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Hi Jason
So as an AAT member you will know not to advise friends from an ethical standpoint.

So - who was this business guru - his mate down the pub?wink

Oops - pressed submit before I had finished, so edited.

The best advice you can give him is to get himself a paid for Accountant (dont do this yourself as you will be in breach of AAT without a practice licence, plus then you will also be in breach of MLR which could result in fines/prison. oh and PII....)

Why has he incorporated without proper advice. Tax planning - key is in the words.

Why is he now in business with his 'partner' - assume thats a life partner rather than a business partner! Is there some avoidance going on?

If you work it through from a purely CT and SA tax point of view, does it make sense?



-- Edited by Cheshire on Thursday 25th of July 2019 12:02:23 PM

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Forum Moderator & Expert

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Business Guru... Pfft.

He's wrong.

What he's advising is not tax avoidance, it's tax evasion so both the client and the advisor would be in serious trouble.

Plus, cherry on the top, he's also advising your client to pierce the veil of incorporation.

No... just.... no...


p.s. welcome to the forum





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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Master Book-keeper

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i and the words anti avoidance in my head at one point for some reason, rather than evasion.

blame it on 33degrees+

hmm



-- Edited by Cheshire on Thursday 25th of July 2019 08:53:12 PM

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Master Book-keeper

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How odd.

Deleted his account.

Fuchin rude not even responding.




-- Edited by Cheshire on Thursday 25th of July 2019 08:56:11 PM

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Forum Moderator & Expert

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Well, it started off with "I have a friend".

Now throw into that pot the line that some business guru (i.e. Google) advises a certain way of doing business.

Then cherry on the top when we tell them that they are being dangerously ill advised they run away

In general thats a business owner whose had a google inspired lightbulb moment.

Don't let it bug you. There are enough site readers that somene will now see that and know how to handle the next client who accidentally manages to Google the right sequence of letters to find similarly dangerous advice on the business forums.

Image result for light bulb groo



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Master Book-keeper

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Lol.

Yes I get (increasingly)bugged by it when the is a seemingly endless stream of folk who completely ignore the responses given, which is what happened over the course of several days, some of whom can't even answer the odd question thrown back to enable folk to answer their originally carpily worded question.

But, I will try to take your advice and no longer give a damn about folk ignoring me.

HB.

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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Newbie

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Removed



-- Edited by Shamus on Thursday 1st of August 2019 09:36:05 AM

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Master Book-keeper

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Jack999 wrote:

Whats your requirements.


WTF???

SHAUN!!!!!!!!!!!!!!!!!!!!!!!!!!

See the profile of this JACK999 - enough said



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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.



Forum Moderator & Expert

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Cheshire wrote:
Jack999 wrote:

Whats your requirements.


WTF???

SHAUN!!!!!!!!!!!!!!!!!!!!!!!!!!

See the profile of this JACK999 - enough said


Sorted biggrin



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Master Book-keeper

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Jack999 wrote:

Removed



-- Edited by Shamus on Thursday 1st of August 2019 09:36:05 AM


Ooooh what did I miss?

Saw Jack's first post in the FFS thread and I was on Veis alert but saw he had made 3 posts so thought I'd read the other two first. Switzerland is a new one though.



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John

Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.



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Leger wrote:
Jack999 wrote:

Removed



-- Edited by Shamus on Thursday 1st of August 2019 09:36:05 AM


Ooooh what did I miss?

Saw Jack's first post in the FFS thread and I was on Veis alert but saw he had made 3 posts so thought I'd read the other two first. Switzerland is a new one though.


It genuinely was as well.

Much of the time they state a random country but then it always tracks back to India or Pakistan. The post was a nothingness but as Joanne indicates, link building. so nipped in the bud.

Glad you reminded me. Let me just have a look at those other two.

laters matey,

Shaun.



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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



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now both mopped up... Lol... The last message was "Oh, this is brilliant for me" which seemed rather apt as I was deleting it!

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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.



Master Book-keeper

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Posts: 7865
Date:

Leger wrote:
Jack999 wrote:

Removed



-- Edited by Shamus on Thursday 1st of August 2019 09:36:05 AM


Ooooh what did I miss?

Saw Jack's first post in the FFS thread and I was on Veis alert but saw he had made 3 posts so thought I'd read the other two first. Switzerland is a new one though.

Haha John. Nothing exciting, just a dumb bloody comment (or 3!) as they were trying to Linkbuild. Stated they are an SEO business but clearly taking the lazy route. Glad Im not a client!



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Joanne

Fallows Hall Ltd

Winner - Bookkeeper of the Year 2015, 2016 and 2017

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

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