Question about expenses

[malvolio]

Ermm. chaps, can I butt in a second...?

IR35 deemed salary is calculated as 95% of gross less allowable business expenses... which sort of includes the tools of the trade (but not training costs...).

[xoggoth]

But only those allowable business expenses necessary for the contract surely? Not expenses spent for an entirely separate line of business.

[malvolio]

But only those allowable business expenses necessary for the contract surely? Not expenses spent for an entirely separate line of business.

Well OK. A company is a company. IR35 is not about companies, it's about personal taxation. If you want to be picky, it is 95% of the gross for the contract in question less any expenses directly related to that contract. General purpose company assets - if you have any - don't come into the equation.

In the OP's case, the sensible answer is either set up a subsidiary company per contract, or use an umbrella, or prove that his contracts - like 90% or more of them - are outside IR35. What he shouldn't do is muddle the IR35 dfee-earning revenue with the venture capital aspect of the original work. Also it depends if the "IR35 " contacts are to pay his mortgage or grow his primary business.