National Minimum Wage or £97 pw?

[philip@wellwoodhoyle]

Back to the original point of this thread, now that the 10% lower rate band is to be abolished, the tax cost of paying the "minimum wage" will be higher due to the loss of the 10% band, making a bigger difference between paying say £5,000 or £10,000 p.a for no real benefit.

[Bluebird]

but surely the lower slary you pay the lower the NI contrbutions - both employer & employee ?

[AZZIK]

For an IR35 Investigation is the IR more likely to go after people who have an turnover in xs of 100k a year as they will be able to get more cash from them or are they equally as like to go for people that have a turnover of 60-70k

[Gonzo]

For an IR35 Investigation is the IR more likely to go after people who have an turnover in xs of 100k a year as they will be able to get more cash from them or are they equally as like to go for people that have a turnover of 60-70k

A private individual would think like this. I take it you have never worked with Civil Servants.

I understand that there is some target driven element to their renumeration now but in my experience, a Civil Servant will put the same effort into chasing £1 of tax as they would £1000.

[liley]

I was referring to a decent contract between your company and your agency/end client. If you want one of those, the PCG is probably your best bet.

They may also be able to offer you a service contract but remember that if this is in place, you are subject to the National Minimum Wage legislation.

I was thinking about Director's service agreement as a equivalent of employment contract where instead a word "salary" there is a word "fee"...and a fee may be small, smaller than NMW (that I read in tax advice by Indicator). They say that where in contract there is a word "fee" and you are paying e.g. 5000 per year director's "salary = fee", the taxman is less likely to argue and treat dividends as salary. The fee can be changed on board meeting. I am wondering what would be the difference, when we would insert a word "fee" in employment agreement?

[Lewis]

A late addition to this thread! Thought you might be interested to know that QDOS won't offer their TLC35 (IR35 tax loss protection) if you pay yourself less than £9,500 per year. They say they have defended many hundreds of cases and only conceded one. So they presumably know what they are talking about and there is a good reason for this salary requirement. Unfortunately I don't know what it is.

[Vito]

A late addition to this thread! Thought you might be interested to know that QDOS won't offer their TLC35 (IR35 tax loss protection) if you pay yourself less than £9,500 per year. They say they have defended many hundreds of cases and only conceded one. So they presumably know what they are talking about and there is a good reason for this salary requirement. Unfortunately I don't know what it is.

Is that £9.5k gross or £9.5k net? Assuming the latter?

[Lewis]

Is that £9.5k gross or £9.5k net? Assuming the latter?

Gross. By the way, they also apply a £1000 excess to the policy for salaries less than £15K per year. So they presumably think <£10K is too risky, £10K is defendable but more risky and >£15K is fine. This is obviously just my interpretation of their rules and not their words.

[Lockhouse]

A late addition to this thread! Thought you might be interested to know that QDOS won't offer their TLC35 (IR35 tax loss protection) if you pay yourself less than £9,500 per year. They say they have defended many hundreds of cases and only conceded one. So they presumably know what they are talking about and there is a good reason for this salary requirement. Unfortunately I don't know what it is.

That's nothing to do with IR35 and everything to do with paying yourself less than minimum wage making an investigation more likely.

[Lewis]

That's nothing to do with IR35 and everything to do with paying yourself less than minimum wage making an investigation more likely.

Like I said I don't know the reason why but thought it worth a mention. I would like to pay myself £97 p/w but want tax investigation insurance more! I don't know if there is anything similar in the PCG insurance or not. Would be intersted to know.