Final Stance on IR35

[themistry]

Hi everyone,

im just putting in the final pieces for my LTD company and now need to decide what todo about IR35.

I know my contract fails, but as many people seem to advocate here, im not sure if I should go head and pay the full tax, or take a small salary and the rest as dividends seening as thought the number of cases brought to trial are so small.

Without questioning the merits of IR35, id welcome the opinions of others here and how you go about doing this for your own contracts. For me it could mean saving an extra £15-£20k.

Thanks everyone,
TM

[el duder]

Hi everyone,

im just putting in the final pieces for my LTD company and now need to decide what todo about IR35.

I know my contract fails, but as many people seem to advocate here, im not sure if I should go head and pay the full tax, or take a small salary and the rest as dividends seening as thought the number of cases brought to trial are so small.

Without questioning the merits of IR35, id welcome the opinions of others here and how you go about doing this for your own contracts. For me it could mean saving an extra £15-£20k.

Thanks everyone,
TM

Depends. My LTD company offers a main service outside of IT. I just do a few contracts per year for cash injections to fund my business therefore avoid IR35.

If i were you i would just run your business as a business and take divies.

[DimPrawn]

Hi everyone,

im just putting in the final pieces for my LTD company and now need to decide what todo about IR35.

I know my contract fails, but as many people seem to advocate here, im not sure if I should go head and pay the full tax, or take a small salary and the rest as dividends seening as thought the number of cases brought to trial are so small.

Without questioning the merits of IR35, id welcome the opinions of others here and how you go about doing this for your own contracts. For me it could mean saving an extra £15-£20k.

Thanks everyone,
TM

Why not spend a couple of hundred quid, join the PCG, get their PCG+ insurance and run the contract by them? If you are bang 100% IR35, then the choice is simple.

[themistry]

Why not spend a couple of hundred quid, join the PCG, get their PCG+ insurance and run the contract by them? If you are bang 100% IR35, then the choice is simple.

Thanks,

I wasnt aware todo this, I will. From what you are saying, once you have joined, you are covered by there insurance scheme?

TM

[expat]

Depends. My LTD company offers a main service outside of IT. I just do a few contracts per year for cash injections to fund my business therefore avoid IR35.

Each contract is in or out of IR35. It doesn't matter what else your company does in general, if a contract is in it is in.

[themistry]

Fantastic,

thanks DimPrawn, I had no idea the services that the PCG provided. Excellent, so I will join the PCG+ programme, then bill as if unaffected by IR35. Should there be a problem, the PCG will handle the problems.

Fabulous

TM

[Pondlife]

Fantastic,

thanks DimPrawn, I had no idea the services that the PCG provided. Excellent, so I will join the PCG+ programme, then bill as if unaffected by IR35. Should there be a problem, the PCG will handle the problems.

Fabulous

TM

The PCG insurance is for the legal costs of the investigation and doesn't cover you for any tax owed.

Have you had your contract reviewed? What makes you so sure you fall foul of IR35?

HTH

[themistry]

The PCG insurance is for the legal costs of the investigation and doesn't cover you for any tax owed.

Have you had your contract reviewed? What makes you so sure you fall foul of IR35?

HTH

Ah, thanks. Well im am just going under worst case scenarios. Should I get the contract, I will join the PCG and have them review it.

Could you offer any advice at the point, in regards to what is acceptable etc?

TM

[LA1]

If your contract falls Inside IR35 you cannot take a dividend payment.

All earnings must be paid as salary. Therefore there are no profits to take as dividend. This means all business expenses such as accountancy fees, company house filing fees, etc must be paid from your net salary. You are only allowed to take the 1st 5% of your earnings as the deemed payment allowance to offset expenses incurred.

You cannot claim for equipment, mobile phone rental, broadband etc, as expenses.

This does not affect your personal expenses such as travelling.

As for IR35 insurance, check the small print but in my experience your contract must be assessed by someone qualified to do so. And if they tell you that you are Inside IR35 then the insurance will not cover you if you then decide to pay yourself as Outside IR35.

Always remember that insurance companies are not on your side and will look for any loophole to avoid paying out a claim. So blindly assuming you can take dividends and therefore get more money and that they will cover the bill if you are caught is unlikely to be true.

[Back In Business]

PCG "Insurance" doesn't cover you tax bill, only covers your legal costs as part of an IR35 investigation. If you loose the case you'll need to pay up. It's good practise to keeps some funds in YourCo for this eventuality.

HTH