Hi Experts,
I have been contracting for one and a half years and wasn't aware of IR35 issues. Having read the various articles abour IR35 and looking at my contract in various companies, it looks like that I will come inside IR35.
I did go through an accountant to set everything up, but he wasn't aware of IR35 in depth, as it mostly applies to contractors. We have three in the company, two of us being the directors and one the secretary. It was setup with trading as an IT Reseller and we did take reseller accounts with all main distributors & did sell some stuff to companies (we still do that). But, as I moved to contracting, I started using the same company as my Ltd company. Anyway, I have been getting my salary from various companies which goes directly into my business account.
As my accountant wasn't aware of IR35 issues, he advised that I can take a portion of rent, electricity, council tax, car mileage apart from my salary so that I pay less tax and I have been doing that. I have been paying Employer NI, Employee NI and PAYE TAx on the salary that I have taken so far.
Is it correct that if I run my own ltd company for contracting and being inside IR35, I don't have to pay Employer's NI?
I have taken about 10% of the contracting income (for 1.5 years, as I extended my financial year to be 1.5 years) as rent, council tax, electricity, car mileage, internet etc and the rest I have taken as my salary and paid employer and employee NI and PAYE tax on that.
I have not been challenged by HMRC on IR35, but I would like to rectify my error. Along with the contracting income, I have generated a turn over of about 15K in the last one and a half year from IT reselling with a profit of maybe 2K. I did couple of weeked consulting jobs which I ran through the same company.
So, as I operate IT reselling services as well through the same company, can I say that I am taking out the expense (rent, council tax etc) and will that be valid?
My questions are:
1. What should I do to correct my finance to be inside IR 35 and not caught and then get penalities?
2. Should I leave this company for IT reselling alone and start a new company just for contracting?
3. What is that we should if we are inside IR35? Take 5% of your annual income as expense and take 95% as salary and pay only employee NI and paye tax (and noe employer NI)?
I just want to correct my business scenario so that I am not caught by IR35 and still do reselling. Should I start a new company or correct issues in the present company and do both through the same company.
I know it is a bit lengthy, but any help would be greatly appreciated. I am going through different websites to know more about IR35 issues.
Thanks in advance,
Johny.
I have been contracting for one and a half years and wasn't aware of IR35 issues. Having read the various articles abour IR35 and looking at my contract in various companies, it looks like that I will come inside IR35.
I did go through an accountant to set everything up, but he wasn't aware of IR35 in depth, as it mostly applies to contractors. We have three in the company, two of us being the directors and one the secretary. It was setup with trading as an IT Reseller and we did take reseller accounts with all main distributors & did sell some stuff to companies (we still do that). But, as I moved to contracting, I started using the same company as my Ltd company. Anyway, I have been getting my salary from various companies which goes directly into my business account.
As my accountant wasn't aware of IR35 issues, he advised that I can take a portion of rent, electricity, council tax, car mileage apart from my salary so that I pay less tax and I have been doing that. I have been paying Employer NI, Employee NI and PAYE TAx on the salary that I have taken so far.
Is it correct that if I run my own ltd company for contracting and being inside IR35, I don't have to pay Employer's NI?
I have taken about 10% of the contracting income (for 1.5 years, as I extended my financial year to be 1.5 years) as rent, council tax, electricity, car mileage, internet etc and the rest I have taken as my salary and paid employer and employee NI and PAYE tax on that.
I have not been challenged by HMRC on IR35, but I would like to rectify my error. Along with the contracting income, I have generated a turn over of about 15K in the last one and a half year from IT reselling with a profit of maybe 2K. I did couple of weeked consulting jobs which I ran through the same company.
So, as I operate IT reselling services as well through the same company, can I say that I am taking out the expense (rent, council tax etc) and will that be valid?
My questions are:
1. What should I do to correct my finance to be inside IR 35 and not caught and then get penalities?
2. Should I leave this company for IT reselling alone and start a new company just for contracting?
3. What is that we should if we are inside IR35? Take 5% of your annual income as expense and take 95% as salary and pay only employee NI and paye tax (and noe employer NI)?
I just want to correct my business scenario so that I am not caught by IR35 and still do reselling. Should I start a new company or correct issues in the present company and do both through the same company.
I know it is a bit lengthy, but any help would be greatly appreciated. I am going through different websites to know more about IR35 issues.
Thanks in advance,
Johny.
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