IR35 any additional taxes to those deducted at source?

[jamesbrown]

The company would invoice e.g. 52,000
The client deducts NI and income tax, meaning the company receives a payment of e.g 40,000
What happens to this money once it's in My Co Ltd' account is up to me. I have to get it out to pay myself. Either as salary or dividends.
The company still makes a profit, albeit a lower one than before.

It isn't recorded as a profit and there is no CT to pay for the same reason because you extract that 40k without further tax due.

I'm not sure what else to tell you. You can choose not to believe us, but you won't get a different answer, I think. The ESMs will be back online soon and you can look at the accounting treatment yourself.

There is no double taxation in the sense you fear.

[Beko]

It isn't recorded as a profit and there is no CT to pay for the same reason because you extract that 40k without further tax due.

I'm not sure what else to tell you. You can choose not to believe us, but you won't get a different answer, I think. The ESMs will be back online soon and you can look at the accounting treatment yourself.

There is no double taxation in the sense you fear.

ha ok I believe you.

I guess I'm trying to work out why the client is so insistent on only engaging with ltd companies then. What is the point in them if the money is just deemed as our personal money.

[jamesbrown]

ha ok I believe you.

I guess I'm trying to work out why the client is so insistent on only engaging with ltd companies then. What is the point in them if the money is just deemed as our personal money.

Most clients are not doing this, FWIW. You'll have to ask them why they decided to go this route. Ironically, it is the core route anticipated by the legislation, but most companies appear to be avoiding an IR35 determination altogether and requiring the use of umbrellas or converting people to FTCs (in order to avoid the risks that come with a determination), which was entirely predictable.

[BlueSharp]

ha ok I believe you.

I guess I'm trying to work out why the client is so insistent on only engaging with ltd companies then. What is the point in them if the money is just deemed as our personal money.

It's odd they won't engage with a brolly as they would not have to manage the payroll. The Ltd could be as simple as trying to ensure you don't have workers rights which is a whole other kettle of fish. As others have said it's your money take it out and spend it but I would keep proof that it has been taxed at source. I would of thought them issuing an inside determination and telling you to manage your tax affairs accordingly would of been a more efficient route as they have pushed the liability on to you.


Out of interest how do you know the company are actually paying the PAYE tax, I assume you will still be issued with a pay slip by them or will the tax deduction be shown on some sort of remittance?

[northernladuk]

ha ok I believe you.

I guess I'm trying to work out why the client is so insistent on only engaging with ltd companies then. What is the point in them if the money is just deemed as our personal money.

We don't know. It's the first time we've seen this so your chance to be a trail blazer for the industry and find out for us.