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New queries, issue 4643

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17 April 2018
Issue: 4643 / Categories: Forum & Feedback

Consultant confusion; Free money; Happy families; Fee consequences

Consultant confusion

IR35 and personal companies providing services to associated companies.

I act on behalf of three trading companies: A Ltd B Ltd and C Ltd. These are all controlled by the same two directors Y and Z. However the directors each use individual companies D Ltd and E Ltd which have no purpose other than to tidy things up and they receive management charges from A Ltd B Ltd and C Ltd.

The directors then pay themselves through D Ltd and E Ltd by way of salaries and dividends.

On reflection the tax position would be very similar were the directors simply to be paid dividends and salary from each trading company and this option remains. Alternatively I suppose they could eradicate D Ltd and E Ltd and the trading companies could then pay management fees to one company...

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