Hi All,
We have a situation where a director/shareholder is in in business with 3 other directors/shareholders each holding 33% of Company A.
One of the directors is the sole shareholder and director of Company B and wants to raise invoices from Company B charging company A for work that he does in Company A, as he feels he will have additional control and for various other reasons.
This isnt a problem under IR35 is it, as he would either take a dividend from Co A or Co B, so the tax effect is basically the same, and any charge from B to A will pay corporation tax, so the tax liability is the same.
Thanks in advance.
DG
Replies (5)
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Does not apply. IR35 is around contracting work when you are pretty much working at a permanent company but not via their payroll. IR35 tries to get you to pay the usual tax and NI instead of the dividend.
I agree in that ...
IR35 seeks to identify individuals who, without the presence of an intermediary, would otherwise fall be treated as an employee by the end client. On the basis that your client is a director of the end client then he would have no obligation to receive payment as an employee unless he has a contract of employment with them already.