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Incorporation and furlough

using CJRS after incorporation

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I have a client who runs a cafe - business has been good for the last 6 months and incorporation is on the cards. 

I am hoping if I contact HMRC they will say we can keep the same PAYE reference so as to avoid any potential problems if god forbid we have another lockdown and need to put staff on furlough.

Anyone had any similar experiences?

Thanks

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By sarahg
12th Jul 2021 13:10

Why not wait until things settle down a bit rather than cause unnecessary issues?

What is the benefit of transferring to a limited company now?

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Replying to sarahg:
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By jonibarnes
12th Jul 2021 13:14

Trading has been strong for approx 6 months and tax will be into higher rates - I spoke to them around Christmas and persuaded them to see out the tax year.

Not sure I can hold them back any longer

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Replying to jonibarnes:
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By Paul Crowley
12th Jul 2021 13:38

Dividend tax just keeps going when into higher rates
NI changes from 9% to 2% once over £50K

Look up TUPE for CJRS issues.

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Replying to jonibarnes:
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By Mr_awol
12th Jul 2021 14:42

I don't know the answer - but if you suspect there could be Covid Grant disadvantages of incorporation then level with the client and explain that by avoiding putting in the pot, they may find themselves unable to take out of it.

Ive nothing against tax planning but when someone chooses to start a business in a pandemic, then because it goes well they want to reduce their tax burden, i have limited sympathy when they subsequently want to use the taxpayer to underwrite these decisions.

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A Putey FACA
By Arthur Putey
12th Jul 2021 14:25

I've never done a PAYE merger or succession, and you'd need to speak to HMRC about eligibility in this case, otherwise the company would apply for a new PAYE scheme and TUPE the employees, which could mean their CJRS claims need to be done by phone until HMRC updates the record. But CJRS is ending in September, isn't it.

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By Wanderer
12th Jul 2021 14:55

jonibarnes wrote:

I have a client who runs a cafe - business has been good for the last 6 months and incorporation is on the cards. 

I am hoping if I contact HMRC they will say we can keep the same PAYE reference so as to avoid any potential problems if god forbid we have another lockdown and need to put staff on furlough.

Anyone had any similar experiences?

Thanks

This will be a succession for which a new PAYE reference will be required.
https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye30045
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By kathyk0410
12th Jul 2021 15:25

We had a similar situation whereby a client incorporated April 21. A new PAYE scheme was necessary though we were able under a "PAYE succession" to submit an April 21 Furlough claim. It had to be done by a technician, so involved a few telephone calls for them to check employee details etc but was possible.

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ALISK
By atleastisoundknowledgable...
13th Jul 2021 17:55

I have a p/ship cafe for whom we staved off incorporation due to not wanting to complicate impending grant funding a few months ago. They made the decision to wait until Oct to incorporate…

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