Absolutely spot on and great explanation of the reality tax wise. I’m going to quote you in future if that’s ok when I next get a troll criticising the self employed!
In theory yes but in practice public sector bodies are treating all contractors as employees (which they most certainly are not all) by applying blanket decisions across the board. See today’s article on recruitment grapevine quoting Dave Chaplin:
“The proportion of contractors deemed within scope of the rules by the BBC, Network Rail and HS2 are 92%, 99% and 98% respectively,” explained Dave Chaplin, CEO of Contractor Calculator.
Sound fair does it? These contractors have no choice other than to walk away. The idea promoted by HMRC that the genuinely self employed have nothing to fear is complete BS I’m afraid - and people such as yourself are falling for the lie!
It is a disaster waiting to happen and deliberate self harm by the Conservative party and so damaging to UK plc, whilst raising a measly amount of extra tax (partly unlawfully).
HMRC fail to understand that contractors get paid a premium and so pay more tax than they will if they are scared off by the reforms and transfer to permie jobs.
It’s utter madness.
Not sure I'd want a case of wine costing £50 to be honest, but a couple of bottles would do!
Exactly, why not? How is it different to a manager saying to his team "I've got you each a bottle of wine because it's Friday"? What makes one a trivial gift and another a "reward for services"? I understand why people might think it just "doesn't feel right" but in law what makes it any different?
Interesting article. No surprise HMRC don't understand their own rules. Was a bit confused by the last section - if I want my PSC to give me and my wife £300 each of wine each year, why does the fact that I am making the decision myself make it a "reward for services" any more than if the same conversation was had between say HR and Finance Director? Would the £600 be deductible for CT and VAT purposes?
Who is going to pay the £5k minimum for liquidation? The directors with no assets? The taxpayer? Throwing good money after bad?
Yes directors must inform all interested parties including creditors. Creditors can then object if they wish - in reality many don’t bother as they know there is no point if there are no assets or no chance of repayment. If there are objections Companies House will suspend the strike off for a couple of months. However if the creditor does not demonstrate they are taking action then Companies House will eventually strike off the company regardless. So yes, the DS01 procedure can be used whether there are outstanding debts or not.
Once the company is struck off a creditor can apply to restore the company to the register to pursue its debt for up to 20 years so there is still that avenue to pursue payment.
I don’t believe it is necessary to clear all debts before applying for strike off. Where does it say otherwise?
1) "Importantly, the company must be solvent: should debts remain then the company must use the winding-up route"
I don't believe that is correct. Can you please point out where you get this from?
2) "Companies House will not strike off a company that has outstanding debts or obligations to HMRC"
Yes they will I believe. If a creditor objects they must follow this up with action e.g. petitioning for winding-up, otherwise the striking off will go through eventually.
3) You don't mention overdrawn Directors' Loan Accounts which will often feature in these cases. I have often wondered what the law says about these re income tax for the Director. HMRC manuals I believe say this should be treated in the same way as a dividend but AFAIK the law says the asset is bona vacantia and property of the Crown so they could in theory pursue it. Is HMRC's view just that - their view, as they would prefer the law to be, or is it backed up by any statute or legal precedent? I suspect they would argue that it is a written-off loan so taxable, but actually is it really written-off or just passed to the Treasury Solicitor? They could then pursue it indefinitely couldn't they?
Dave, as per my comment further down this thread - surely it would be fairly easy for insurance companies to sell me a policy so I could indemnify my clients against any future tax risk, thus removing all their risk? I know you deal with the Insurance industry through your business - lots of money to be made I'm sure for someone entrepreneurial like yourself?