The House of Lords didn't agree with you on that

It's not clear what your objection is to: the limited company or the wife.

If the former: in sectors where the use of employment agencies is common practice, like IT, you literally cannot find work as a contractor without a limited company. It's a requirement to participate in the market. And the market is large. The reason is to remove the risk of accrual of employment rights on the one hand and to limit liability on the other.

If the latter, what a load of s**t. It's like saying if two people own a garage, the one who services the cars is allowed to profit but the one who runs the administration, finances and so on is not (this is precisely analogous to Arctic Systems, by the way). Whereas in truth if two people take equal risk on a venture they are entitled to equal reward.

Now there most certainly are people who start a limited company to go contracting and give half the shares to a spouse who contributes nothing, or maybe gets named as CoSec but that's it. If HMRC went after those people I think they'd take them to the cleaners and rightly so.

If you're not familiar with the level of incompetence HMRC bring to the table check out Lime IT in the tax tribunal cases (HMRC sought taxes and penalties on the basis of clauses that, oops, weren't actually in the contract....). Some of this stuff is also in the obiter dicta from the judicial review of IR35 as well.

If you're an HMRC fan, none of this is happy reading.

Posted By: Old Man on October 17th 2018 at 21:51:24

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