Dragonfly tax bill and corporation tax

[KentPhilip]

Interesting. Another reason to not go into higher rate bracket at any point.

Hmmm. So this means you'll build up funds in your company over time.

Can your company "store" funds in a Swiss bank account?

[ASB]

Hmmm. So this means you'll build up funds in your company over time.

Can your company "store" funds in a Swiss bank account?

Your company can bank where it likes. But that might not actually be answering the question.

[Lewis]

Hmmm. So this means you'll build up funds in your company over time.

Can your company "store" funds in a Swiss bank account?

Unless you are "income shifting"

[BarneyOwl]

There is a whole bunch of stuff somewhere in the deemed calculation about this. This is to allow offsets of amounts effectively paid.

At the time of IR35 creation I made the following observation in my correspondence with my MP:-

Year 1 profit of 100k. Pay 20k corp tax and 80 dividends. As a result of the dividends about 10k of higher rate tax is actually paid.

Subsequently found in IR35 and as such a deemed salary of 95k is assessed on the individual. The individual is then assessed based on this salary. There is a deduction available (usually as far as I can work out) for the CT but NOT for the higher rate tax already paid by the individual.

I did get a reply via my MP from some bod at HMRC, however this didn't really address things and merely stated that there was no element of double taxation. I was not convinced.

It may have improved, there may be a way of restating the accounts or obtaining other relief against the income tax and NI - but I couldn't work out how.

Have a look at the Finance Act 2000:

http://www.opsi.gov.uk/acts/acts2000...17_en_39#sch12

Part 7 details the deemed calculation. It does not mention offsetting CT so I don't think this is included in the calculations.

Part 13 details "claims for relief". Note subsection (3):

"If on a claim being made the Inland Revenue are satisfied that relief should be given in order to avoid a double charge to tax, they shall give such relief by way of amending any assessment, by discharge or repayment of tax, or otherwise, as appears to them appropriate."

So from this, I beleive the 99k Dragonfly bill DOES NOT include any cliams on relief that may be made and so could be substantially less, if HMRC agree to the claim.

[Hiram King Of Tyre]

Is this the "service companies" question of P4?

[AZZIK]

Is this the "service companies" question of P4?

This is being discussed on this thread:

http://forums.contractoruk.com/accou...ax-return.html

By the way hmrc have worded it - we all have to complete this box??