Contractor - Redundancy?
Discussion
As a ltd company contractor am I allowed to be made redundant from my own ltd company? My current contract looks as though it could be terminated early due to the current cuts, which is fair enough. Can I make myself redundant though and receive the usual tax free redundancy payment?
Landlord said:
Are you going to continue contracting elsewhere or change completely? If the latter, have a look in to Entrepreneurs Relief.
Caveat: I am not an accountant so it could be a red herring.
To do this you would have had to start it in Jan/feb as I think they are closing the door on this relief as far as Im aware (my accountant told me).Caveat: I am not an accountant so it could be a red herring.
As for the OP, your company is losing its service contract with the client, you are not being made redundant, therefore to get the money out you need to wind up your company as you are not employed by it as you are the owner.
Du1point8 said:
Landlord said:
Are you going to continue contracting elsewhere or change completely? If the latter, have a look in to Entrepreneurs Relief.
Caveat: I am not an accountant so it could be a red herring.
To do this you would have had to start it in Jan/feb as I think they are closing the door on this relief as far as Im aware (my accountant told me).Caveat: I am not an accountant so it could be a red herring.
As for the OP, your company is losing its service contract with the client, you are not being made redundant, therefore to get the money out you need to wind up your company as you are not employed by it as you are the owner.
They are actually extending it and increasing the limits.....apart from that he is right.
E55 Max said:
Du1point8 said:
Landlord said:
Are you going to continue contracting elsewhere or change completely? If the latter, have a look in to Entrepreneurs Relief.
Caveat: I am not an accountant so it could be a red herring.
To do this you would have had to start it in Jan/feb as I think they are closing the door on this relief as far as Im aware (my accountant told me).Caveat: I am not an accountant so it could be a red herring.
As for the OP, your company is losing its service contract with the client, you are not being made redundant, therefore to get the money out you need to wind up your company as you are not employed by it as you are the owner.
They are actually extending it and increasing the limits.....apart from that he is right.
Can it be started now on a company or say in June/July?
Posting here more for the philosophical argument rather than the legal one but, what are the terms of your employment contract with the company? Are you employed to undertake a specific role?
Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
edc said:
Posting here more for the philosophical argument rather than the legal one but, what are the terms of your employment contract with the company? Are you employed to undertake a specific role?
Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
For the OP to be a contractor and not break the IR35 the OP would need to be employed like this:Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
OP > employed by OP Ltd > Employing its services to an agency > subcontracts to Final Client.
Therefore the OP is not directly an employee... if not then the OP is on shaky ground.
I think the OP is proposing this: If client cancels the contract and OP Ltd decides it can't employ its staff (OP) due to this loss of work, can OP be made redundant from OP Ltd (with some redundancy payout)?
As said above, employees are often made redundant from consultancies when work dries up.
As said above, employees are often made redundant from consultancies when work dries up.
Every contractor I know, working through a Ltd. is a director of that Ltd.
Directors (while sharing some of the properties of employees) are not employees.
A brief google
http://www.redundancyhelp.co.uk/PayQuick.htm
reveals :
Directors may be employees if they work under a contract of employment. They are unlikely to qualify if they have a controlling interest in the company.
Directors (while sharing some of the properties of employees) are not employees.
A brief google
http://www.redundancyhelp.co.uk/PayQuick.htm
reveals :
Directors may be employees if they work under a contract of employment. They are unlikely to qualify if they have a controlling interest in the company.
I'd be very surprised if the OP wasn't a director of OP Ltd.Du1point8 said:
edc said:
Posting here more for the philosophical argument rather than the legal one but, what are the terms of your employment contract with the company? Are you employed to undertake a specific role?
Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
For the OP to be a contractor and not break the IR35 the OP would need to be employed like this:Along different lines is it arguable that your company and role is similar to that of an employee consultant in a consultancy business? Naturally, redundancy can apply in such businesses.
OP > employed by OP Ltd > Employing its services to an agency > subcontracts to Final Client.
Therefore the OP is not directly an employee... if not then the OP is on shaky ground.
Perhaps there is something in company law that governs this sort of scenario a I doubt there is anything in employment law. I have been the HR lead in one business and made myself redundant and run the 'process' myself!
wow busy day! Thought this topic might have been dead. So am a Director and an employee, in essence the only employee, contracted to an agency that contracts to the client, legit outside of IR35. So the original thought was could I legitimately make myself redundant as the contract had been cancelled as it may be a while before I get another placement and it could be tax efficient for me personally not to have my ltd. company sat there until the next thing comes along.
Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
powelly said:
wow busy day! Thought this topic might have been dead. So am a Director and an employee, in essence the only employee, contracted to an agency that contracts to the client, legit outside of IR35. So the original thought was could I legitimately make myself redundant as the contract had been cancelled as it may be a while before I get another placement and it could be tax efficient for me personally not to have my ltd. company sat there until the next thing comes along.
Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
but you are not being made redundant, you are the owner of the Ltd.Of course, I'm not considering leaving the contract market, but when times are 'sticky' was wondering if there was a clever 'tactical' way through it all that was within the legal system.
The Ltd lost a contract, not you...
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