Choices for non-dodgers.

[ASB]

It's quite clear why as well - if you think you can be under IR35 and pay divis, I'm afraid you are badly wrong in your assumptions. If you are IR35 caught, you pay PAYE and NICs on all your gross less the 5%, so dividends are not an option.

I think you need to talk to an accountant before HMRC catches up with your rather inventive ideas of book-keeping. Right now you appear to commiting tax evasion...

Having an off day

You can of course pay divis when IR35 caught. Agreed it is probably pointless but in no way does it constitute any form of evasion. Need to be considered in the balancing calc is all.

The remainder of the 5% is (I think) tax free. That is where MrsGoof was sourcing one part of the divdends from - perfectly legitimitely.

The fees are also netted down from a vat point of view. Thus the profit on the flat rate scheme (if appropriate) is outside IR35 it is other income (I would conced that some accountants don't think this way). This is subject to CT in the usual manner and the remainder available for distribution as a dividend. I am suspicious of MrsGoof's 13% flat rate though. I didn't think there were any that low in this general line of business.

[ASB]

Not me!

But I do understand what a dividend is for, it's the reward to investors for risking their capital, and it comes from the profit, the making of which was only enabled by their capital. The principle is central to Capitalism.

I don't pay dividends because I haven't invested capital to earn them. If you like, not because I believe in giving the maximum possible to the IR, but because I believe in capitalism.

A principled approach. But capital is more than money. Unfortunately out tax code does not exactly follow capitalist principles, thus trying to marry the two to falls apart.

Who I am to critisise your approach though, it is perfectly valid. What you do show is that you are not a business, you are a self employed tradesman. Unfortunately the system does not let you behave as such. If it did you'd be happy I guess.

[expat]

What you do show is that you are not a business, you are a self employed tradesman. Unfortunately the system does not let you behave as such. If it did you'd be happy I guess.

Absolutely! That is exactly how I see myself.

[ASB]

Absolutely! That is exactly how I see myself.

That makes two of us. In principle I'd have been perfectly happy paying the s/e regime on my entrie income.

Since the political system denies me that ability I operate with the structure they demand. I choose to take advantage of it, you don't.

Of course you can actually be self employed....

Mr Expat sets up a contract for services with Expat Ltd.
Expat Ltd pays Mr Expat the entire fee. Less a small percentage for admin and profit. Mr Hector won't go after Expat Ltd because there is no money in it and the only recourse he has is to declare Mr Expat an employee of Expat ltd.

1) Your principles are intact
2) You get a better return on your money due to the different NI and expenses regime [No er's NI, Class 4 is only 8% not 11%]
3) Expat Ltd can pay you a small divi (which you won't mind because it has been built up out of capital]

A number of poeple I know who are self employed implemented this structure for agency work etc. How effective it would be in this post IR35 era I don't know but some used to talk about in on the PCG fora. If you do investigate this do let me know how it pans out.