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2 year rule for Entrepreneur relief

New client - appointed liquidator for old business, now needs a new one thanks to IR35

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Summary position

New client 

In process of winding up his company using MVL, net assets around £200k

Now finds that with IR35 being deferred a year his employer wants him to remain Ltd

Now needs newco but doesn't want to risk entrepreneur relief 

Any advice ?



Replies (4)

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By Matrix
24th Mar 2020 17:28

There was an identical question last week if you do a search.

Do you mean he doesn’t want to lose capital treatment? Do you mean the 2 year rule for claiming ER or the anti avoidance provisions?

For the latter it depends what is the main purpose for closing the company.

I would ask to go on the payroll, there is more job security, forget tax!

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By fellowcraft
24th Mar 2020 22:32

Can't he be employed via an umbrella via PAYE?

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By Mr_awol
24th Mar 2020 23:18

This client is the type of a-hole who is probably whinging all over Facebook trying to get people to sign a petition for ‘full pay for freelancers’

His ‘employer’ should ‘employ’ him.

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By saki69
25th Mar 2020 07:16

It's the anti avoidance, reclassifying the distribution of assets as income rather than capital which is the concern

If the employer is insisting on Ltd, if the client spouse creates newco,with spouse being sole shareholder and director, and client is merely an employee, then this should avoid an issue ?

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