Is IR35 irrelevant given no taxable profit?

[DotasScandal]

And why is this under "HMRC Scheme Enquiries" ?

[cojak]

And why is this under "HMRC Scheme Enquiries" ?

That was my thought as well. Other posters have joined in this thread to answer IR35 (thank you all, btw), but this is not the place for this question and so I've moved it.

Don't forget that this forum isn't all about HMRC Scheme Enquiries...

[ASB]

That statement is true. But it needs context. If the expenses associated equal income then ir35 is neutered. Simple example pay it all in pension contributions.

of course claiming other company related expenses, eg accountancy, is not reducing the taxable profit In ir35 terms. So in that context it is false.

[SueEllen]

And why is this under "HMRC Scheme Enquiries" ?

The questioner seems to be mixing IR35 with a scheme. This is why I told them to consult a tax lawyer.

[TheFaQQer]

Does anyone have a view on this statement, do you believe it to be TRUE or FALSE? In this example, assume that there was no Ltd Co profit because all invoiced income went out as business expenses but not to any employees. Assume there are no employees, just 1 or more office holders.

If required to calculate IR35 a contractor must use the turnover of the Limited company (personal service company) through which they operate as deemed income.
PAYE and National Insurance is due on this amount less a flat 5% deduction for expenses.
Given the lack of taxable profit IR35 however becomes essentially irrelevant in the eyes of HMRC

False - the contractor must use the income received from the inside-IR35 contract, minus 5% minus valid expenses as the basis for calculating the deemed income.

Company turnover is irrelevant. Profit is irrelevant.

[LisaContractorUmbrella]

Yes I get that. That is what HMRC are stating. What I am asking is weather the statement I original said is true or false. It's not my statement and I'm seeking a professional view on it. Take into account the the Ltd Co has no employees, pays not wages or expenses, just has 1 or more office holders, pays nothing, not even divs to any person. All the invoiced money for services provided by the company (not a named individual) go out. Lets say to a PMC or a TRUST (but not an EBT).

And then presumably you would, at some point, draw from the Trust?? If so you have just avoided paying tax on your earnings and should expect a visit from HMRC, if not then what's the point?

[FarmerPalmer]

False - the contractor must use the income received from the inside-IR35 contract, minus 5% minus valid expenses as the basis for calculating the deemed income.

Company turnover is irrelevant. Profit is irrelevant.

WHS