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Small company/group of companies IR35

Are 4 small companys added up for IR35 exemption rule

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We have 4 small limited companys with the controling interst in each of 75% with one share holder. Do we need to add them together or are they treated as individual companys for applying the new IR35 rules. Each company is under the small company definition but added together they are over the limits with staff and turnover.

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By Duggimon
24th Jun 2021 09:46

How can there be one shareholder who has 75% of the shares?

I don't know the answer, I was just curious about that part of the question.

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Replying to Duggimon:
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By Hugo Fair
24th Jun 2021 12:27

Poor grammar, but I presume (in context of OP's question) it should have read ...

"We have 4 small limited companies - in each of which a 75% controlling stake is held by a single share-holder. Although the controlling share-holder in each company is the same individual, can they still be treated as individual companies when determining the applicability of the new IR35 'size' rules? Or do we need to add them together before applying those rules?
[Each company on its own falls within the small company definition, but added together they are over the limits relating to staff and to turnover.]"

If that's the question, then I don't know the answer (I try to avoid IR35 queries)!
But it would seem likely that OP would have to consider all four companies as being 'connected companies' - in which my vote is for Yes (applying the 'size' rules to the combined 4 companies' figures).

EDIT: According to https://www.gov.uk/guidance/april-2020-changes-to-off-payroll-working-fo... ... when determining who the (size) rules apply to "There are also rules which cover connected and associated companies. If the parent of a group is medium or large, their subsidiaries will also have to apply the off-payroll working rules." This of course doesn't address the exact question asked by OP but is probably a hefty hint in the direction for which I've voted.

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Replying to Hugo Fair:
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By Hugo Fair
24th Jun 2021 15:17

Although it's from a different set of guidance (for EA), there are some clear rules for "deciding if one company is connected to another" at:
https://www.gov.uk/government/publications/employment-allowance-more-det...

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