Question,
I'm currently working through a composite, being paid salary and dividend, I've worked under this composite for a year since April 04. I'm about to put my first tax return in for Apr 04 to Apr 05, by my calculations I will have to pay £9k tax on the dividends recieved for this period.
Now I've been told that if you go over a certain limit in terms of the amount of tax you owe at self-assessment, they will ask you to pay the same amount of tax, in advance for the period Apr 05 - Apr 06 (pay some in Jun 05 and rest Jan 06 I think) as they will assume you will be recieving the income again that period.
I've decided that I now want to move from the composite to a standard umberalla and give the IR what they want as if I fail IR35 (because I do). What evidence will I need to provide to the IR to show them I wont be recieving the dividend income in tax year Apr 05 to Apr 06 ? I don't want to end up paying the IR tax on account and then having to claim it back at the end of the year. Basically I cannot afford to pay the tax on account if and wait till the end of the year, if I tax in the ar*e and give the IR 41p in every £1 I earn.
I'm currently working through a composite, being paid salary and dividend, I've worked under this composite for a year since April 04. I'm about to put my first tax return in for Apr 04 to Apr 05, by my calculations I will have to pay £9k tax on the dividends recieved for this period.
Now I've been told that if you go over a certain limit in terms of the amount of tax you owe at self-assessment, they will ask you to pay the same amount of tax, in advance for the period Apr 05 - Apr 06 (pay some in Jun 05 and rest Jan 06 I think) as they will assume you will be recieving the income again that period.
I've decided that I now want to move from the composite to a standard umberalla and give the IR what they want as if I fail IR35 (because I do). What evidence will I need to provide to the IR to show them I wont be recieving the dividend income in tax year Apr 05 to Apr 06 ? I don't want to end up paying the IR tax on account and then having to claim it back at the end of the year. Basically I cannot afford to pay the tax on account if and wait till the end of the year, if I tax in the ar*e and give the IR 41p in every £1 I earn.
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