Billing for being a director.

Can I bill a wholly owned subsidiary that is registered in an EU country for being a director

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I partook in a management buyout of my employer of the last 20 years.  I did not purchase shares directly but rather set up a limited company which I lent the funds to purchase stock in my employer.   I am a non exec director of both my employer (Company A  - UK Ltd Company) and a wholly owned  EU registered subsidiary company (Company B) of my employer.  I am also the sole exec director of the company I set up to purchase the shares (Company C).   

So for clarity Company A owns 100% of Company B.  Company C owns less than 30% of Company A.  I personally am a director of all three companies.  I am an employee of Company A.  I am a share holder of only Company C.

 

So my question.   Can Company C invoice Company B for provision of my services as a director without falling foul of IR35 rules?  I was not previously a director of Company B and have never been on the payroll of Company B.  Could someone also clarify that I definitely cannot bill Company A from Company C for services as a director as I am on the payroll at Company A.

Many thanks in advance.

Replies (9)

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By williams lester accountants
16th Apr 2024 17:48

Looks like it’s time to get an accountant!

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Replying to williams lester accountants:
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By EDG
16th Apr 2024 17:53

I have two! Neither seem certain of the answer and they are leaning on opposite sides of the fence! Hence seeking more opinion.

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By Leywood
21st Apr 2024 11:17

Post a copy of your original request to them and a full copy of their opinions.

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By paul.benny
16th Apr 2024 17:51

I don't wish to appear snarky but might you be better off asking whatever advisers you used for the transaction? They will be closer to the detail and in particular will understand why you chose to create a company to hold your investment.

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Replying to paul.benny:
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By EDG
16th Apr 2024 17:57

The initial advisors were the pre buyout accountants who looked after all of the previous owners business portfolio which was valued in billions! They are a little out of my price range. The two accountants I have access to now who work for 2 of the 3 companies seem unsure and are leaning on opposite sides of the fence hence seeking further opinions. Thanks for replying.

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Replying to EDG:
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By paul.benny
16th Apr 2024 18:30

With every respect, I think you need to challenge the advisers who are giving contrary opinions. I'm guessing that one is your own adviser and the other is adviser to the group (ie A and B) and so is coming at this with a slightly different perspective. That may explain the different positions.

In any case, your advisers will be in possession of fuller facts than would be appropriate to share here. They are also being paid and have indemnity insurance as recourse should their advice be defective.

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By Bobbo
16th Apr 2024 18:40

Why not just go on the payroll of company B? Or be paid more through the Company A payroll and A can make a management charge to B?

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Stepurhan
By stepurhan
16th Apr 2024 22:00

If you have two advisers giving you different opinions, it is almost certainly because one or both of them does not have the full picture.

That said, simply saying they are "leaning on opposite sides of the fence" doesn't really tell us much. Have either or both of them said why they advise whichever route they recommend? If you really want to get a sensible answer here, knowing the reasoning behind the current advice you are getting is pretty important. It could reveal factors you haven't even considered putting in your question because you don't appreciate their relevance.

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By Brend201
20th Apr 2024 21:10

And depending on where the EU company B is registered, it may not be possible to invoice a company for the services of a director. At least one EU country that I know of requires that any payment for the services of a director must be done via payroll.

So it may be time to get more knowledgeable advice.

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