Trading through an LLP and Small Ltd Co
I have recently acquired a client from a 5 partner firm.
The work done is outside of IR35
The client (Mr C) has been set up with an LLP and a small close company (Co Ltd) of which he is the sole shareholder and director
The LLP has two partners, my client and Co Ltd
Last year the profit earned by the LLP was shared between the partners in the ratio Mr C £7,475 : Co Ltd £60,000
Co Ltd awarded dividends to Mr C in the sum of £48,000 and paid £12,000 CT
My first reaction is that the whole thing is unnecessarily complicated and to dissolve the LLP and just trade through Co Ltd. The client has no idea why things have been arranged in this way and is generally critical of the advice he has received.It seems to me that the only beneficiary of such an arrangement are the accountants who have two sets of accounts to prepare.
Am I missing something?