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That is one accountant's view.
Other accountants views are that you should pay a "reasonable" salary, then dividends. Their view, backed up by unofficial conversations with HMRC inspectors, is that they are less likely to spend huge amounts of time investigating for little gain.
Doesn't this further suggest that one should only ever have short contracts (up to 6 months) at as many different clients as possible in order to avoid becoming a juicy target for IR35 investigation? Once HMRC see they have to trawl through a dozen contracts at a dozen different clients over 5 years, they may be less inclined to proceed.
As my accountant recommends i get paid (outside IR 35) Directors fee and remaining monies as Divis. But i come across other contractors with different accountants who recommended min. wage and divis. My accountant said Dir' fee and divi is most efficient way to keep tax and NI payments low......but as most of us trying to be on the ball to make sure the advice i get is correct and they are not pushing me into a easy option for them but can put me on HMRC radar.
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