Advise needed.. limited Company/Sole trader

JEvans_2

Hi

My husband and the man he works with have always been Sole Traders. Sub contracting through CIS Scheme.

Other man is now setting up as a limited company and my hubby is going to continue to subcontract through new limited company 

They have asked him to go share the cost of buying a van. My question is where does he stand? I presume they won't be able to claim costs back through the new company? Will they need to buy the van in both there names? Any advise would be great

Thanks

J

MattMattMattUK

JEvans_2 said:

Hi

My husband and the man he works with have always been Sole Traders. Sub contracting through CIS Scheme.

Other man is now setting up as a limited company and my hubby is going to continue to subcontract through new limited company 

How exactly? Will he be PAYE, if not he may well fall foul of IR35.
https://www.gov.uk/guidance/check-employment-status-for-tax

JEvans_2 said:

They have asked him to go share the cost of buying a van. My question is where does he stand? I presume they won't be able to claim costs back through the new company?

That entirely depends on how his employment is structured.

JEvans_2 said:

Will they need to buy the van in both there names? 

Very difficult to buy a van in two names. Will he be using the van for work, does he have his own vehicle he would use already?

JEvans_2 said:

Any advise would be great

I would probably suggest not to take this route, personally I would be setting up my own Ltd company and doing things properly. 

DullGreyGuy

MattMattMattUK said:

JEvans_2 said:

Hi

My husband and the man he works with have always been Sole Traders. Sub contracting through CIS Scheme.

Other man is now setting up as a limited company and my hubby is going to continue to subcontract through new limited company 

How exactly? Will he be PAYE, if not he may well fall foul of IR35.
https://www.gov.uk/guidance/check-employment-status-for-tax

The OP won't be caught by IR35 as they are a sole trader, the "friend" maybe though the CIS scheme applies to both sole traders and LTDs; though thats as far as my knowledge of how it works for LTDs goes. 

JEvans_2 said:

Other man is now setting up as a limited company and my hubby is going to continue to subcontract through new limited company 

They have asked him to go share the cost of buying a van. My question is where does he stand? I presume they won't be able to claim costs back through the new company? Will they need to buy the van in both there names? Any advise would be great

It's not 100% clear what you mean, is he going to be an employee of the LTD? A co-director and shareholder? Still a sole trader so therefore a sub-sub-contractor to the main contractor?

JEvans_2

Hi

He will be still a Sole trader and subcontracting to the ltd company.

He is not a director or Shareholder.

He will be working with the director himself who will be using the van more than him. Usually gets picked up and dropped off by him

Thanks

Emmia

Would it not be easier for the Ltd to buy the van, or is it that the other guy can't afford it so wants a contribution?

JEvans_2

Emmia said:

Would it not be easier for the Ltd to buy the van, or is it that the other guy can't afford it so wants a contribution?

I think maybe it is..  as this was the original Plan!

DullGreyGuy

JEvans_2 said:

He will be still a Sole trader and subcontracting to the ltd company.

He is not a director or Shareholder.

He will be working with the director himself who will be using the van more than him. Usually gets picked up and dropped off by him

Joint ownership is going to be a pain and likely result in future disagreements. Would argue it's cleaner for the LTD to own the vehicle and for you to rent it when required/available. Note that their insurance would need to be comfortable with this arrangement. 

JEvans_2

DullGreyGuy said:

JEvans_2 said:

He will be still a Sole trader and subcontracting to the ltd company.

He is not a director or Shareholder.

He will be working with the director himself who will be using the van more than him. Usually gets picked up and dropped off by him

Joint ownership is going to be a pain and likely result in future disagreements. Would argue it's cleaner for the LTD to own the vehicle and for you to rent it when required/available. Note that their insurance would need to be comfortable with this arrangement. 

This was my understanding......I had a feeling this would happen.

Just need to sit down and hash everything out

Thanks 

Grumpy_chap

JEvans_2 said:

Hi

My husband and the man he works with have always been Sole Traders. Sub contracting through CIS Scheme.

Other man is now setting up as a limited company and my hubby is going to continue to subcontract through new limited company 

They have asked him to go share the cost of buying a van. My question is where does he stand? I presume they won't be able to claim costs back through the new company? Will they need to buy the van in both there names? Any advise would be great

Thanks

J

Why is your husband going to subcontract via his mate's Ltd Co and not simply continue as sole trader direct to the current end client?

Why does your husband's mate think he should pay half the cost of the new Ltd acquiring a van?
Would your husband pay half the cost of a van for your mate?
Would your husband pay half the cost of a van if he worked for a regular company?