Can I Get Paid into my Limited Company?
This is an interesting one. The answer is yes and no, but mainly no. This is due to a naturally convoluted and confusing system put in place called IR35 which basically means that you cannot be paid directly into your Limited Company when you are an individual working on a job. However, as ever there are legal loopholes and I will tell you what they are! Hoorah! Ultimately this all boils down to who the buck stops with. Reader, please note that this is not legal advice and anyone who uses these loopholes does so at their own risk, you have been warned!
Before we start here are some definitions that will help you understand this.
The Individual (The person that wants to be paid via their business UTR to their Company account)
The Agency (The one paying the operative and invoicing the end client)
The End Client (The company that the operative is working for)
Right let’s get into the meat and potatoes of this. There are two ways of looking at this:
1 - it falls within current IR35 scope. This means that End Client takes liability and will not pay you into Limited Company unless they have bulletproof processes, which is unlikely.
2 - it falls into scope of the old IR35 legislation or outside IR35 scope, whichever way you prefer to phrase it. This means that the Individual take liability if there is an investigation by HMRC.
So, what do you need to do to fall outside of IR35? The End Client, that is the company you are working for, not the agency, will need to confirm with the agency and/or the individual that they are classed as a small company and therefore current IR35 legislation does not apply to them. To do this they will need to confirm in writing that they hit at least two of these three criteria:
- Turnover is less than £10.2 million
- Fewer than 50 employees
- Balance Sheet is less than £5.1 million
If at least two of these three criteria are met then you can get paid into your limited company. This means small companies can still benefit from the ability to pay into a limited company. If The End Client does not fall into two of these categories, then it is very unlikely that they will pay you Limited.