What happens to my LTD (Car, equipment) when I move to IR35?

[cojak]

I have to say that I feel for you faxfan.

I'm sure that there are many contractors holding car leases and the like in their companies who are going to be stuffed come April.

I would imagine that these leases are difficult to get out of, and I don't know how easy they are to transfer from a business to a personal account. This makes closing your company difficult I would imagine.

[northernladuk]

How do you get this 5% if all your money is paid via paye? Same applies for expenses

Because he's missed the point I've made twice.

[WTFH]

Because he's missed the point I've made twice.

Or to put it another way:
He doesn't.

He doesn't get 5%.
He doesn't get expenses.
Everything is just PAYE and as such the LTD serves no beneficial purpose.

(at least that's my take on it)

[cojak]

Or to put it another way:
He doesn't.

He doesn't get 5%.
He doesn't get expenses.
Everything is just PAYE and as such the LTD serves no beneficial purpose.

(at least that's my take on it)

After 6th April 2020.

He knows this now I think.

[northernladuk]

After 6th April 2020.

He knows this now I think.

To be fair, with the raft of 'ZOMG what is diz IR35' questions we've had this week alone I'm assuming all the questions are related to what will happen next i.e. after April, not before

[cojak]

To be fair, with the raft of 'ZOMG what is diz IR35' questions we've had this week alone I'm assuming all the questions are related to what will happen next i.e. after April, not before

No, you really do need to make this explicit.

The 5% expenses is the example of this, we are jumping ahead of ourselves if we don’t make this clear.

[northernladuk]

No, you really do need to make this explicit.

The 5% expenses is the example of this, we are jumping ahead of ourselves if we don’t make this clear.

Yeah but I've just had a thought. Why is it different only after April? Even if you go inside now it's PAYE or a brolly anyway so much the same?

I've a feeling I've missed something fundamental here though.

[fidot]

The 5% is relevant when income comes into the limited company for an inside contract as declared by the contractor - I.e. only private sector currently.

[jamesbrown]

Well, that's why I'm asking here for guidance. It sounds like this is valid for now until April 2020 and things will be changing in a yet unknown way?

Sort of.

The draft legislation is available. This technical legislation is unlikely to change in substantive ways as it proceeds through Parliament. Clearly, there is some uncertainty about the shape of the UK gov't next April, but I still think the draft legislation is an excellent guide to what will actually happen under most permutations, including Labour (to begin with - obviously much more drastic subsequently).

The draft legislation is very clear.

Is your end client a small company, as defined by the Companies Act?

If your answer to the above is yes, then you will determine your own status and still have the 5% expenses allowance after April 2020, assuming you declare the contract inside (things will operate as now in the private sector).

If your answer is no, and your OP certainly implies that, then you will not have this 5% expenses allowance. You should assume you won't have it, because that is, unfortunately, very likely.

[mudskipper]

From now until April 2020 you can claim 5% expenses.

After April 2020 it is wrong , misguided and hopelessly optimistic.

Do you actually know what’s going to happen in April 2020?

Assuming the changes come into effect, the 5% allowance disappears.