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Corporation tax

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    Corporation tax

    Hello
    I had a quick query ; if work that was thought to be outside IR35 is now deemed inside of ir35 then when calculating the tax to pay back , is the corporation tax paid taken into account for the whole duration of the contract
    Last edited by jarjarbinks; 17 November 2019, 09:55.

    #2
    If you are asking whether you have to pay corporation tax as well as PAYE, then no. Effectively as all your company income is paid out as salary (or pension or whatever) there's no profit, so no CT.

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      #3
      Originally posted by Amanensia View Post
      If you are asking whether you have to pay corporation tax as well as PAYE, then no. Effectively as all your company income is paid out as salary (or pension or whatever) there's no profit, so no CT.
      Hi what I was referring to was corporation tax already paid and the contract then subsequently getting caught inside IR35, in which case when calculating tax to pay back is the corp tax already paid taken into account ..

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        #4
        "Taken into account" in what respect?

        If you're caught by IR35 then basically the whole of the company income goes straight back out as salary to you. If you've paid CT in respect of previous years, and those previous years are now being deemed as inside IR35, then the company will now have to pay historic PAYE (including employer's NI) for those years, but should be refunded the CT. The PAYE will of course be more than the CT so you will owe money.

        There may also be penalties, potentially.

        Comment


          #5
          Originally posted by Amanensia View Post
          "Taken into account" in what respect?

          If you're caught by IR35 then basically the whole of the company income goes straight back out as salary to you. If you've paid CT in respect of previous years, and those previous years are now being deemed as inside IR35, then the company will now have to pay historic PAYE (including employer's NI) for those years, but should be refunded the CT. The PAYE will of course be more than the CT so you will owe money.

          There may also be penalties, potentially.
          Thank you I read somewhere that the ct refund goes back only a couple of years hence the question..

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            #6
            Company losses can generally only be offset against CT in the current or previous year. But that's not what's happening here. I am certain that previously paid CT will be taken into account - most likely by treating it as a partial payment of the new PAYE liability.

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              #7
              Thank you very much.

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