QDOS cranking up the pressure with IR35 insurance

[Hex]

Hmm, interesting that they should say this. My accountant, NW, advise the 7488 as OK.

Im assuming though that since Abbey Tax are the ones the PCG use for their normal IR35 legal coverage that they dont impose this on normal PCG coverage? Be scary for all of us who thought they were covered only to find PCG/Abbey Tax told us no way because our salaries weren't enough.....

Also, like you say, assuming minimum wage is 12K (is it?) then I cant see how that's vastly different to 7.5K to be honest. Neither of which are really are commercial salary.

One thing - how much extra NI per year would be due if you decided to up your salary in this way? Am I right in saying that both employer and employee NI would come into play here, so around 19-20%. £4500 = £900 extra NI?

QDOS dont have this limitation do they? Surely better to leave salary alone and go with QDOS rather than Abbey Tax?

Abbeytax doesn't insist on NMW, but they do advise it and there is an excess to pay if you ever claimed and you hadn't paid NMW. I can't remember the excess exactly but it was about a couple of thousand. It's to do with risk. They reckon there is more risk of being investigated if you don't pay NMW.

This doesn't affect the PCG insurances at all.

[psychocandy]

Abbeytax doesn't insist on NMW, but they do advise it and there is an excess to pay if you ever claimed and you hadn't paid NMW. I can't remember the excess exactly but it was about a couple of thousand. It's to do with risk. They reckon there is more risk of being investigated if you don't pay NMW.

This doesn't affect the PCG insurances at all.

I know Abbey Tax are meant to be the experts but this sounds like bollacks to me.

How on earth can the amount of salary you pay yourself as director be in, any way, be connected to IR35 apart from the obvious? (i.e. If your deemed income is £70K, and you pay yourself £8K then theres £62K to pay tax/NI on. If you pay yourself £12K, there's only £58K)

Surely IR35 is based purely on the contract and working practices and sod all to do with how much you pay yourself. Like someone pointed out, if you're going to argue about salaries then paying as much as a McD employee is hardly going to to cut the mustard either is it?

Surely this would only be relevant if you paid yourself £30K or something (which would somewhat defeat the object anyway and is what HMRC want us all to do anyway!)

[northernladuk]

I know Abbey Tax are meant to be the experts but this sounds like bollacks to me.

How on earth can the amount of salary you pay yourself as director be in, any way, be connected to IR35 apart from the obvious? (i.e. If your deemed income is £70K, and you pay yourself £8K then theres £62K to pay tax/NI on. If you pay yourself £12K, there's only £58K)

Surely IR35 is based purely on the contract and working practices and sod all to do with how much you pay yourself. Like someone pointed out, if you're going to argue about salaries then paying as much as a McD employee is hardly going to to cut the mustard either is it?

Surely this would only be relevant if you paid yourself £30K or something (which would somewhat defeat the object anyway and is what HMRC want us all to do anyway!)

Surely the low salary/rest divis is synonymous with the type of avoidance that IR35 is looking to catch so it has to be connected. If you were inside you wouldn't be doing it that way so it is in someway linked. It is a grey area as all accountants seem to disagree with the exact amount but the reason some don't go lowest is to avoid unwanted attention which would indicate risk so it has to be a valid flag. Maybe a better way to put it is most IR35 investigations come off the back of a tax investigation so making yourself a tax target increases risk of IR35 investigation?

[jamesbrown]

I know Abbey Tax are meant to be the experts but this sounds like bollacks to me.

Unless you're offering an insurance product tailed to a specific individual, risk comprises probability of successful investigation (based on all past cases) and potential loss. So it isn't bollocks insofar as a lower salary implies a larger amount potentially in dispute. I don't buy the argument on what's commercial or not, but I do buy the possibility that it's a flag for a PAYE investigation that might lead to an IR35 investigation. However, like anything else, it requires some judgment. I'm not aware of any evidence that it's used by HMRC, but they're not about to publish their risk profiling either. My feeling is that the NI band is perfectly justifiable and many accountants do recommend this.