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I posted a question on the "legal" board, but maybe this board is more appropriate..
Ive been on the same contract at the same workplace for 2 years now, working under the Parasol brolly. I live 160 miles from work and lodge but travel home weekends. As i am no longer able to claim expenses, and the client don't want me to leave any time soon, i'm looking at getting round this rule if possible. legally of course... so,
if i use a brolly company for 2 years, then start a ltd co, with a new contract (albeit the same terms and workplace), are my expenses counted against the new Ltd Co, as opposed to myself (whilst under the brolly)??? =============
as a contractor myself (ltd) I have not heard of any ways around this rule
your expenses have simply been a method in order to ofset tax.
your expenses as far as I am aware are linked to you not your company
I'm always of the opinion its better to trade within the law rather than gain a few thousand pounds =============
Little tricky as the new limited company you might form would be an entirely separate corporate identity then you could submit your expenses to it and reclaim them on the basis that to do so was part of your contract with your new company.
But the action is fraught with potential problems.
First of all you may be deemed to be in breach of the IR35 rules.
And secondly as you have worked at the same location albeit the same terms and conditions but now from a different company HMRC have rules which state that they can set aside any arrangement, even if technically legal, if they consider it to be tax avoidance.
Hypothetical, but even if you won an IR35 argument HMRC could still disallow the expense claim and decide to classify the expenses as wages under the tax avoidance rules. =============
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