IR35 Confusion -

[pauljh]

Hi All,
So having given up on getting answers from QDOS (and cancelling my IR35 insurance), I'm after some initial advice before I spends lots of money on a dedicated IR35 person.

Some general question (please point me at other postings if already answered (i did search))

1. I employ (pension, AL, etc etc) Mr A at £50000 a year and charge him out at £500 a day to client B for a recurring 12 month contract. Client B say the contract is inside IR35, does that mean Mr A has to pay tax on earning £500 a day?
2. If statement 1 is false (which I'm 'sure' it is), what is the difference between me earning £20000 a year (from my own Ltd) and charging client B £500 a day?, why would I (just because I own the company) have to pay tax on the £500 a day?
3. If someone is a PSC with just themselves as an employee/share holder and are taxed on the £500 a day (and straight into their personal account) how would they go about growing their business?, i.e. wanting to pay some other programmers to work on a personal idea for their Ltd? (i.e. the company wouldn't be getting any money and so would have no funds to pay them).
4. Lastly does anyone know a good dedicated IR35 legal service that can help with my contract and these sort of questions on a paid/proven basis.

Regards and please be gentle.

[eek]

Hi All,
So having given up on getting answers from QDOS (and cancelling my IR35 insurance), I'm after some initial advice before I spends lots of money on a dedicated IR35 person.

Some general question (please point me at other postings if already answered (i did search))

1. I employee (pension, AL, etc etc) Mr A at £50000 a year and charge him out at £500 a day to client B for a recurring 12 month contract. Client B say the contract is inside IR35, does that mean Mr A has to pay tax on earning £500 a day?
2. If statement 1 is false (which I'm 'sure' it is), what is the difference between me earning £20000 a year (from my own Ltd) and charging client B £500 a day?, why would I (just because I own the company) have to pay tax on the £500 a day?
3. If someone is a PSC with just themselves as an employee/share holder and are taxed on the £500 a day (and straight into their personal account) how would they go about growing their business?, i.e. wanting to pay some other programmers to work on a personal idea for their Ltd? (i.e. the company wouldn't be getting any money and so would have no funds to pay them).
4. Lastly does anyone know a good dedicated IR35 legal service that can help with my contract and these sort of questions on a paid/proven basis.

Regards and please be gentle.

I employee - do you mean employ?

[eek]

And then I check your previous posts and find the appropriate thread

https://www.contractoruk.com/forums/...n-account.html which you seem to have posted in.

Yes it's from March but nothing has changed.

[pauljh]

I employee - do you mean employ?

Yes, amended, luckily I'm not giving contracts for my english skills..

[pauljh]

And then I check your previous posts and find the appropriate thread

https://www.contractoruk.com/forums/...n-account.html which you seem to have posted in.

Yes it's from March but nothing has changed.

so i did!?, i have no recollection.. Old age is setting in..

[WTFH]

These sound like similar questions you were asking a few months back, and while the answers really haven’t changed that much, you should be aware that it’s not how you word your contract that will determine IR35 status from April, but it is up to your client.
Your accountant may be having a bit of fun doing your company tax returns (as well as your personal one) if you’ve been determined inside but still trying to pay yourself through salary + dividends, or paying “employees” in ways other than PAYE.

(I’m typing slowly today - listen to eek)

[Paralytic]

Yes, amended, luckily I'm not giving contracts for my english skills..

Nice one

[pauljh]

These sound like similar questions you were asking a few months back, and while the answers really haven’t changed that much, you should be aware that it’s not how you word your contract that will determine IR35 status from April, but it is up to your client.
Your accountant may be having a bit of fun doing your company tax returns (as well as your personal one) if you’ve been determined inside but still trying to pay yourself through salary + dividends, or paying “employees” in ways other than PAYE.

(I’m typing slowly today - listen to eek)

They have said the contract will be inside IR35. so I've no idea how this will work for my employees and myself..

[pauljh]

3. If someone is a PSC with just themselves as an employee/share holder and are taxed on the £500 a day (and straight into their personal account) how would they go about growing their business?, i.e. wanting to pay some other programmers to work on a personal idea for their Ltd? (i.e. the company wouldn't be getting any money and so would have no funds to pay them).

Regards and please be gentle.

Anyone know about 3? (its not for me) how will "contractors" fund other business activities if all their day rate is going into their personal account?

[eek]

So the issue comes down to a simple one:-

If the contract is your employee and you do no work for that client you have nothing to worry about - the person who is doing the work is paid via PAYE.

If the contract requires you to do work for the client then you have a problem as if you take money out as dividends you aren't compliant.