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Inside IR35 - no dividend payments at all?

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  • Qdos Contractor
    replied
    Originally posted by VectraMan View Post
    Presumably that's the same and "excluding VAT" means including the FRS gain.
    Correct.

    Leave a comment:


  • VectraMan
    replied
    Thanks QDOS. IR35 is slightly worse than I thought.

    Another related issue is that the new online CT600 replacement (accounts and corporation tax) asks for "Turnover" and explicitly says "excluding VAT". I googled and some people said that should include the FRS gain, and others saying the FRS gain should be part of "other income". Presumably that's the same and "excluding VAT" means including the FRS gain.

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  • Whoknows
    replied
    Great thanks, finally some clarity!

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  • Qdos Contractor
    replied
    Originally posted by Whoknows View Post
    Back to the original theme of this thread........accountant has come back to me and advised that:

    1. Yes, the 5% expenses allowance would be considered company profit if not spent, and could be drawn as a dividend
    2. The gain from the VAT FRS (6.5% in my case) IS considered IR35 revenue and so is not removed from the VAT Exclusive turnover figure, used for the deemed payment calculation.

    So the first one is cleared up, but today I've had different stories from multiple accountants on item 2.
    It’s a confusing one, not helped by HMRC’s vague guidance. Someone linked to BIM31585 earlier where they - rather confusingly - state that the figures to be used should be ‘VAT exclusive’. Unfortunately they mean excluding the VAT actually payable, not simply entering the original net amounts invoiced. There is another (very old) page here which is a little clearer on the issue.

    You gave the example on page 2 based on net sales of £104k with a FRS rate of 13.5%. The amount you would have to enter in ‘step 1’ of the deemed payment calculation would be £112,450 not £104k, so the FRS ‘gain’ is therefore rolled into the overall deemed payment calculation.

    So your current accountant is correct, which is hopefully gives some consolation.

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  • Whoknows
    replied
    Originally posted by northernladuk View Post
    So wait until Monday, see what they say and then ask us (us being fellow contractors not accountants) and see if our random advice ties up with your professional advice.
    Back to the original theme of this thread........accountant has come back to me and advised that:

    1. Yes, the 5% expenses allowance would be considered company profit if not spent, and could be drawn as a dividend
    2. The gain from the VAT FRS (6.5% in my case) IS considered IR35 revenue and so is not removed from the VAT Exclusive turnover figure, used for the deemed payment calculation.

    So the first one is cleared up, but today I've had different stories from multiple accountants on item 2.

    Leave a comment:


  • Qdos Contractor
    replied
    I'll get an up to date number in the morning, but last time I asked our consultants we had 12 live IR35 cases on the go. We've closed quite a few down over the last few months too.

    It's not at 2003 levels, but it's certainly not dead. I'm sure other specialist firms have similar numbers, plus accountants and people who are 'going it alone'.

    I promise I'm not making it up! Anyone who wants to is welcome to come to our offices and meet our consultants who work on the cases.

    Leave a comment:


  • mudskipper
    replied
    Originally posted by Unix View Post
    They know already, only people with an agenda would deny this, (sellers of IR35 products) and HMRC forum plants (NLUK)
    I think that for a long time IR35 has been 'manageable' - this was achieved by gaining clarity on the criteria through case law (largely thanks to the purveyors of those insurance products) so that we could ensure our contract terms and working practices fell outside; and by purchasing protection for the statistically unlikely event that we were investigated. But there is a new focus on it; we may be left alone for 2016, but there seems little doubt that the net will be tightened in the not too distant future.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by Unix View Post
    So you say
    Do you not thinks it's dead (which I'm sure it isn't and will be resurrecting again very soon) because people have put a lot of thought and effort is fighting HMRC off to the point you can be happy in your ignorance for the time being?

    What's your views on Apr17?
    Last edited by northernladuk; 22 February 2016, 17:08.

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  • Unix
    replied
    Originally posted by Whoknows View Post
    Tell that to my friend who has just been told to hand over £80k.
    So you say

    Leave a comment:


  • Whoknows
    replied
    Originally posted by Unix View Post
    IR35 is de-facto dead, its kept around to scare newbies into handing over their cash.
    Tell that to my friend who has just been told to hand over £80k.

    Leave a comment:

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