IR35 Exposure Calculator

[TheFaQQer]

Thanks for all of your replies. Can anyone clarify if the expenses below are considered part of the 5%?

Business Insurance £185
Telephone/Internet £200
Use of Home Office £216
Accountancy £1608

Also, how does my annunal business mileage of around 27500 miles (£8k) get treated?

£45k - basically 45% liability per year seems high.

All expenses other than those specifically exempt (salary, pension etc) are part of the 5%. The ones that you list all have to come out of your 5%.

Travel and subsistence cannot be claimed if inside IR35 so will come out of your personal income.

Taxation is quite high, particularly when you get hit with both employers and employees National Insurance. And don't forget to account for interest at 8.5% on those bills too.

If you haven't got professional representation in place to be able to fight your case if it comes, then you really should consider having something.

[meeko]

I thought travel could be claimed up until April 2016?

I do have representation and I'm confident I have been correct in my decision to operate outside IR35, I'm just keen to understand the potential liability.

With the £100k retained profit, hypothetically speaking, could I draw this as dividends, pay appropriate tax on Self Assessment, which would be subtracted from the total owed?

[pr1]

With the £100k retained profit, hypothetically speaking, could I draw this as dividends, pay appropriate tax on Self Assessment, which would be subtracted from the total owed?

yes

[malvolio]

yes

...provided none of the £100k came from the IR35-caught contract of course.

[meeko]

All of the £100k comes from the IR35 caught contract. What would happen in that instance?

[TheFaQQer]

All of the £100k comes from the IR35 caught contract. What would happen in that instance?

You can't pay a dividend from IR35 caught income, unless it's left over profit after you've paid all the appropriate taxes.

[VectraMan]

With the £100k retained profit, hypothetically speaking, could I draw this as dividends, pay appropriate tax on Self Assessment, which would be subtracted from the total owed?

No. You can only pay a dividend out of anything left over from the 5%; i.e. profit.

Inside IR35 anything you haven't taken as salary (apart from the above) is effectively now your money, and so you can just pay it into your account without declaring it as a dividend or whatever. And then you declare that on the SA and pay the appropriate tax as deemed income.

But that's pointless. The better way is just to pay it all as salary/pension in the first place.

[VillageContractor]

All of the £100k comes from the IR35 caught contract. What would happen in that instance?

Be prepared to bend over if you lose

[VectraMan]

With the £100k retained profit, hypothetically speaking, could I draw this as dividends, pay appropriate tax on Self Assessment, which would be subtracted from the total owed?

I realise now what you meant.

You mean can you pay it now before you know if you've won or not? Well probably, but it's pointless (unless you were going to anyway).

[meeko]

This is all hypothetical - of course I could draw it all as dividends now and then declare on my self assessment, but what would be the option post enquiry when it was deemed this money was earned inside IR35?