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Entrepreneurs relief and employment

A client is an employee of a personal company and is planning to sell their shares in the future.  They meet every criteria to get ER, except...

They haven't actually done any work at the company in months, and will not do any before the sale of the shares.  However they are still an employee and are serving their notice but on no pay (as doing no hours).  For the employment test, how do we define employee?  He is not working at the company (though perhaps he could sweep up for half an hour a week?) but he is still on the employee list, he is just doing no work and getting no pay.

Any ideas?

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By blok
20th Mar 2012 11:40

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Generally whether a person is an officer or employee of a company or not is dependent upon whether that person has an employment or holds an ‘office’ within the meaning of ITEPA2003/S4 and ITEPA2003/S5 (3) - for guidance on these areas see the Employment Status Manual.

There are no specific requirements regarding either working hours or the level of remuneration. The condition is simply that the individual should be an officer or employee.

 

Cut and past job from CG64110 to start you off.

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blok wrote:

Generally whether a person is an officer or employee of a company or not is dependent upon whether that person has an employment or holds an ‘office’ within the meaning of ITEPA2003/S4 and ITEPA2003/S5 (3) - for guidance on these areas see the Employment Status Manual.

There are no specific requirements regarding either working hours or the level of remuneration. The condition is simply that the individual should be an officer or employee.

 

Cut and past job from CG64110 to start you off.

 

Thanks blok, I'd seen that second paragraph on my travels, which reassured me of the no pay bit, but it seems overly generous that you can be kept on the payroll (albeit never receiving any money) and maintain your ER qualifications.

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