TUPE

[The Wycher]

I just wondered if anyone had any practical experience of TUPE.

Basically I am buying the local office of the firm I currently work for and the sale contract includes the standard TUPE clause and will list me as an employee. I am buying it via a limited company and do not intend to make my self an employee as I will be on a Director's salary and dividends.

I was proposing to resign before signing the contract (I am significantly protected as the clients only know me and have been told what is happening so not worried about the contract not then being signed and me being unemployed), with this breaking the contract of employment and therefore no one transferred under TUPE.

Does anyone have any knowledge as to whether this will or won't work.

Many thanks for any input.

Wycher

[doubleup]

Sorry don't quite understand.

You are the employee being transferred and you own the company that the activities are being transferred to?

Why do you want to enter into a contrived arrangement to avoid TUPE?  It's your company that it affects.  You will be presumably getting a "promotion" to director and a new employment contract, so apart from possibly redundancy rights (which would lead to an option to take 30k tax free if it goes tits-up) TUPE would surely be largely irrelevant?

ps don't you have a lawyer advising you?

[The Wycher]

Sorry don't quite understand.

You are the employee being transferred and you own the company that the activities are being transferred to?

Why do you want to enter into a contrived arrangement to avoid TUPE?  It's your company that it affects.  You will be presumably getting a "promotion" to director and a new employment contract, so apart from possibly redundancy rights (which would lead to an option to take 30k tax free if it goes tits-up) TUPE would surely be largely irrelevant?

ps don't you have a lawyer advising you?

Hi Thanks for responding, I do have a lawyer for the contract but they are not an expert on TUPE and there do seem to be some very knowledgeable people on here. Basically the most tax efficient way of paying your self as the owner of a company is a small salary to reflect your directorship and the balance by dividends. This is based on you not being an employee just an officer of the company and therefore you don't have to pay national minimum wage etc. However, technically if you TUPE over as an employee I would not be able to follow this route. Hence the desire to terminate my employment prior to the purchase.

Sorry if I was not clear earlier.

[MANTIS01]

I have practical experience of TUPE. When presented with the new conditions or new contract you have the right to object. This will signal the end of your employment and you can leave without notice.

[EvilPie]

Sorry don't quite understand.

You are the employee being transferred and you own the company that the activities are being transferred to?

Why do you want to enter into a contrived arrangement to avoid TUPE?  It's your company that it affects.  You will be presumably getting a "promotion" to director and a new employment contract, so apart from possibly redundancy rights (which would lead to an option to take 30k tax free if it goes tits-up) TUPE would surely be largely irrelevant?

ps don't you have a lawyer advising you?

Hi Thanks for responding, I do have a lawyer for the contract but they are not an expert on TUPE and there do seem to be some very knowledgeable people on here. Basically the most tax efficient way of paying your self as the owner of a company is a small salary to reflect your directorship and the balance by dividends. This is based on you not being an employee just an officer of the company and therefore you don't have to pay national minimum wage etc. However, technically if you TUPE over as an employee I would not be able to follow this route. Hence the desire to terminate my employment prior to the purchase.

Sorry if I was not clear earlier.

Really can't see any problem whatsoever. Just quit your current job then start a new one with the new Company. You don't even need anything in writing unless there are other shareholders. TUPE is there to benefit the employee so like Mantis says you just don't take it.

I assume the lawyer is sorting the contract with the Company and your client. The client may want something in place to ensure that you remain with the Company as it's you that they want by the sounds of it. TUPE doesn't affect them at all because that wouldn't stop you walking away as an employee if you wanted to.

Regarding paying yourself you might find this site useful: http://www.uktaxcalculators.co.uk/dividend-vs-salary.php

Good luck with the new Company!!

[BulldozerD]

Even though you own the company you will still be an officer/employee (and partially paid as such) so why not carry your rights over?

[The Wycher]

Basically I don't need to be an employee in my company as any rights would only come out of my pocket anyway!.

I think I have a working solution so will go with that.

Many thanks to anyone who responded.