IR35 - Small Business

Jaguar_Skills

I recently discussed with an IFA the possibility of setting up a ltd company and invoicing my company this way and also splitting my salary between me and my partner (who currently doesn't work).

If the company is small (we turnover less than £4m per annum) is this a legitimate way of me bringing down my tax bill? I am currently paying 45% tax with salary circa £180-£200k

Any help that could be provided would be great. 

DullGreyGuy

Why are you going to invoice your company?
What do you do?
Who are your clients?

IR35 legislation is now the worry of the client unless they are overseas or too small for it to apply to them. 

Jaguar_Skills

DullGreyGuy said:

Why are you going to invoice your company?
What do you do?
Who are your clients?

IR35 legislation is now the worry of the client unless they are overseas or too small for it to apply to them. 

Invoice my company so I can split my salary between me and my partner thereby reducing tax, gaining my personal allowance back and using hers. 

I am a surveyor. 

My clients are mainly architects and developers. 

uknick

If you intend to resign from your current employer and then they hire your Ltd company to do the work you currently do, you will definitely fall foul of IR35.  Unless, that is, you expand your customer base and your current company becomes one of many clients.

In addition, your original post says you'll split your current salary between you and your wife.  How will you do this? Will you each get salaries and/or dividends?  If you make your wife salaried, what exactly will she do for her pay?

If the advice of your IFA was to set up Ltd and then have your current employer as your only client to save tax I would be looking for another IFA very quickly as they clearly don't know what they talking about.

DullGreyGuy

Jaguar_Skills said:

DullGreyGuy said:

Why are you going to invoice your company?
What do you do?
Who are your clients?

IR35 legislation is now the worry of the client unless they are overseas or too small for it to apply to them. 

Invoice my company so I can split my salary between me and my partner thereby reducing tax, gaining my personal allowance back and using hers. 

I am a surveyor. 

My clients are mainly architects and developers. 

You wouldnt invoice your company, your company would invoice its clients. 

If your client meets at least two of the following then they are exempt from the IR35 regulations:

• Annualised turnover of up to £10.2m
• Balance sheet assets of up to £5.1m
• Average number of employees of up to 50

Then they are exempt of IR35 regulations and the regulations pass to your company... your company cannot have exemption no matter its size for consideration of yourself, only if you sub-contracted could you avoid your requirements in relation to the sub contractor. 

As above, your wife must earn her monies so what is she going to do to justify the salary?