Inside IR35 tax Liability

[Fred Bloggs]

Again nope - it is up to the appropriate part of the chain to pay the appropriate tax on all the money sent to the limited company.

so if the limited company has received £30,000 the amount of tax owed is all the tax required on a take home pay (I.e what ends up in your bank account) of £30,000 (or approximately £25,000).

That will not be happening because the money the agency would have used to pay EENIC, ERNIC and income tax has already been paid the the Ltd Co as gross pay against an invoice. On this point I think you are quite incorrect.

But it's of no consequence and there's nothing more to say. Hopefully the OP will get the advice he seeks from WTT.

[jamesbrown]

That will not be happening because the money the agency would have used to pay EENIC, ERNIC and income tax has already been paid the the Ltd Co as gross pay against an invoice. On this point I think you are quite incorrect.

But it's of no consequence and there's nothing more to say. Hopefully the OP will get the advice he seeks from WTT.

Yeah, sure. So the agency is insolvent and the transfer of debt rules kick in and the client pays (and perhaps the directors of the agency too, ultimately).

There is a difference between must pay and can pay. The supply chain must pay and I wouldn't want to be them (including directors of the agency) if they cannot pay, just sayin'.

[Keanu2020]

But that isn't true either because some outside IR35 payment was already made. It's the contractor who has to sort out the tax on that. Nobody else.

The issue I have is that if I’m having to pay personal tax on the sums, makes no sense to then process through ltd and pay Corp Tax on it as well. Double tax for no reason, and already paying high rate personal on it all.

[Keanu2020]

Same reply as previous post too.

So - You are saying that the OP's Ltd Co has to pay every penny received gross back to the agency and the agency will then process that back into their system, followed by PAYE or payment to an umbrella company? I doubt any agency has the mechanism for such things.

I think that's an unrealistic expectation myself. But who knows in the brave new world. Much more likely the Ltd Co accounts for the months already paid as inside IR35. That's far more manageable set of circumstances.

I offered to pay the deemed payment through my ltd and provide the calculation to do this. No surprised it was turned down. Why would the recruitment agent pay the full tax liability when they can just do voluntary disclosure to HMRC at 20% and transfer the rest of the tax liability to me.

[jamesbrown]

I offered to pay the deemed payment through my ltd and provide the calculation to do this. No surprised it was turned down. Why would the recruitment agent pay the full tax liability when they can just do voluntary disclosure to HMRC at 20% and transfer the rest of the tax liability to me.

They can’t do this, but you do now need representation, as noted above.

[Keanu2020]

Same reply as previous post too.

So - You are saying that the OP's Ltd Co has to pay every penny received gross back to the agency and the agency will then process that back into their system, followed by PAYE or payment to an umbrella company? I doubt any agency has the mechanism for such things.

I think that's an unrealistic expectation myself. But who knows in the brave new world. Much more likely the Ltd Co accounts for the months already paid as inside IR35. That's far more manageable set of circumstances.

Agent is washing their hands of it all. No money is being paid back as such. All they are doing is in essence raising a P60 (the voluntary disclosure), paying the 20% base tax rate and leaving the rest for me to resolve, even though the liability is theirs. There is no umbrella as never set up that way, was never contracted as inside at the start.

[eek]

Agent is washing their hands of it all. No money is being paid back as such. All they are doing is in essence raising a P60 (the voluntary disclosure), paying the 20% base tax rate and leaving the rest for me to resolve, even though the liability is theirs. There is no umbrella as never set up that way, was never contracted as inside at the start.

Yep because the figure is going to bankrupt them - however, it’s their issue and not yours so get decent advice starting at WTT

[eek]

I offered to pay the deemed payment through my ltd and provide the calculation to do this.

Why did you do that? It’s not your fault

[Keanu2020]

Why did you do that? It’s not your fault

Agreed, but could tell towards the end they were not batting straight. Figured at least if I tried to help resolve no one could say didn't do my part. I wanted to avoid situation in now. They were demanding I do a new starter form and go on their payroll, but provided no real details, just some vague noise about 'HMRC rebates' going to them.

Oh, and they said wanted to be transparent and work together to resolve, starting with me sharing all my company accounts and personal tax details with them in full (I of course declined).

[hobnob]

It was labelled outside. I doubled checked in writing it was outside, and operated for a number of months like this before it was discovered that it was inside from the start and the recruitment agents got it wrong.

Just to clarify something, did they actually send you a copy of the SDS, or did they just send you an email saying "Yes, you're definitely outside"?