[TamDenholm]

To be clear, in the UK, setting up a Ltd company is incredibly simple and easy to maintain.

It costs £12 and takes about 20min to create. Then you get a bank account with startling/monzo which is very simple (easier than high st banks). All tax is done online which again is fairly simple. Sign up for freeagent (or another accounting package) and just keep on top of your accounts. When it comes to filing your annual accounts and confirmation statement, again its all incredibly simple and can be done yourself without the need for an accountant as you'll qualify for mico-entity accounts and freeagent handles it for you. Or you can pay roughly £1200-£1500/yr to an accountant and have them do it for you.

Its honestly not hard at all, happy to answer anyones questions on the matter.

[LemmyInThePub]

> Or you can pay roughly £1200-£1500/yr to an accountant and have them do it for you.

Any half decent accountant will probably be able to SAVE you more than this; mainly by optimising your tax affairs (assuming you have a modest turnover).

It's money well spent.

[ajb]

That doesn't help with IR35, as the law looks at the practical situation of the individual and not the formal situation to determine if they are really an employee.

[TheOtherHobbes]

Basic tests for IR35:

https://www.brooksonfaq.co.uk/knowledge-base/what-are-the-ir...

It's obviously a minefield, especially substitution. If you're being hired for specific niche in-demand skills, why should you be expected to provide someone else?

What seems to happen in practice is the Revenue occasionally has a spasm and decided to investigate a selection of freelancers. This ends with a lot of confusion, plus various tribunals and court cases, because the reality is not clear and many freelance situations can be argued either way.

The simplest option - not infallible, but very helpful - is to have multiple clients and work mostly from home on fairly short projects. That makes it very hard to argue that you're an employee.

If you're on-prem and exclusive for an extended period for a set number of hours, supervised by management and using equipment supplied by the employer, it gets much harder to convince a court that you're genuinely freelancing.

[TamDenholm]

And as long as you're running a proper business with multiple clients, your own equipment, your own hours, etc, then you dont fall foul of IR35. If you are however basically being treated the same as a PAYE employee would, 1 client, their office, their equipment, their hours, their conditions, etc, then you're dodging tax and thats the point of IR35.

[Silhouette]

As long as you're running a proper business you shouldn't fall foul of IR35. Sadly that won't stop a lot of risk-averse large clients insisting on paying you through an umbrella company. And it won't stop many other clients from insisting on money-costing and time-wasting IR35 assessments so they can take out insurance policies. And even if you don't have any of that to deal with it won't make you feel any better if HMRC decide for any reason to launch an IR35 investigation that will eat a shocking amount of your time and money even if you are eventually found to have done absolutely nothing wrong. All of this risk has a chilling effect on this whole sector of the economy.

Even if they're determined to keep IR35 the government could at least clarify their intent for people like contractors who work with a single client but for a limited time. Right now I have the sense from my own network that there are a lot of games being played in that sector to try and avoid being caught by IR35 because no-one really knows if they're supposed to be. If the government wants to charge people who are working as flexible labour through a PSC the same taxes as permanent employees then they should at least be honest about it and accept responsibility if that flexible workforce then shrinks and economic damage results. Or if they want to incentivise the flexible workforce then they should give clear guidance on how long is considered to still be "temporary" and won't be treated as disguised employment (even though the "employee" probably lacks any of the job security and benefits of a real employee as most contractors do) to remove the risk for many genuine short-term workers and increase the efficiency of the contracting market.

[gadders]

And we're only seeing it from the IT sector point of view. IR35 also wrecked the HGV driver market and is one of the reasons for the shortage of drivers.

[ghostwriter]

What are the ramifictions of a company that hasn't earned during a tax year? Are you still expected to pay anything at the end of the tax year (at least in terms of a salary to yourself)?

[TamDenholm]

What pjc50 is correct, but might help to be more specific. If you literally mean its had 0 revenue and 0 expenses, then its basically a dormant company and you can file so.

However, if you've ran the company in previous years, even if you've taken a year off and had 0 incoming revenue, you may have other taxes to pay. There wouldnt be any corporation tax as theres no profit, but you may have some very small expenses like bank fees, maintenance of servers, subscriptions, etc that might be left over. So you wouldnt be dormant, you'd be a loss making company, but still active.

If you had a big chunk of money in the biz bank account and still paid yourself, there would be taxes on that, both on the company and personal side depending on how you paid yourself.

I wouldnt recommend setting up a Ltd company to literally do nothing with it though, 0 revenue and 0 expenses, you're not really benefitting for any reason.

[pjc50]

You're not required to pay yourself anything in particular. If you do, then you have to pay NICs and tax; you may want to pay NICs even if you're not earning for tedious pension reasons, but that's not specific to the company structure.

You still have to file accounts even if that's just one page of "income 0 outgoing 0", for which there is a charge of £13. https://informi.co.uk/business-administration/filing-your-an...

[moralestapia]

Can you do that as a foreigner (to the UK)?

[dejv]

Yes, but opening UK bank account is not that easy without your presence there.

[thdespou]

Thanks for the info.