Inside IR35 Contract Via Limited company- how to withdraw Salary

[Prab35]

Thanks for the response eek and northernladuk.

eek @ I asked agency and they don't have any clue and simply asking me to provide P45 so that you will get taxed correctly which I did on Monday. Spoke to my accountant and she is also not aware because this process is bit new and most of the people may not aware of this. Her comments like below

"I am still extremely unsure of this setup.

1. You cannot take the whole amount out as the tax paid is in lieu of corporation tax
2. I cannot see this being paid as employment income as then it should be paid into your personal account
3. I am not sure how this is going to work out at all as your status is not an employee nor self employed.
4. If this is the case then you should be able to take wages from your company.

I am not sure what to advise you as this whole setup is very ambiguous but I will send a letter to HMRC to find out.

northernladuk@ Agency given me an option to choose either my limited company or Umbrella so I chooses Limited company route. I did a research and felt Limited company route is better option for longer run because my Company working with 2 other incomes and not willing to closing the company.
I'm not Sure need to pay taxes twice and HMRC will not deduct tax twice.

I found a video in you tube which is useful but they didn't explain I have to be an employee for my limited company to take salary. please take a look

https://www.youtube.com/watch?v=_Ufvoay5eCc

[northernladuk]

Where did the offer of agency payroll appear in the OP's list of options - the offers were:
i) Umbrella
ii) Deemed payments into his limited company.

In his opening post which says 'Limited company (Agency Payee)'

[eek]

Thanks for the response eek and northernladuk.

eek @ I asked agency and they don't have any clue and simply asking me to provide P45 so that you will get taxed correctly which I did on Monday. Spoke to my accountant and she is also not aware because this process is bit new and most of the people may not aware of this. Her comments like below

"I am still extremely unsure of this setup.

1. You cannot take the whole amount out as the tax paid is in lieu of corporation tax
2. I cannot see this being paid as employment income as then it should be paid into your personal account
3. I am not sure how this is going to work out at all as your status is not an employee nor self employed.
4. If this is the case then you should be able to take wages from your company.

I am not sure what to advise you as this whole setup is very ambiguous but I will send a letter to HMRC to find out.

northernladuk@ Agency given me an option to choose either my limited company or Umbrella so I chooses Limited company route. I did a research and felt Limited company route is better option for longer run because my Company working with 2 other incomes and not willing to closing the company.
I'm not Sure need to pay taxes twice and HMRC will not deduct tax twice.

I found a video in you tube which is useful but they didn't explain I have to be an employee for my limited company to take salary. please take a look

https://www.youtube.com/watch?v=_Ufvoay5eCc

Let's answer your points

1) deemed payments are already fully taxed - so you can take the none VAT side of the money out and pay it into your own bank account.
No Corporation tax is involved here - the deemed payment is taxed paid.

2) It is employment income but as your limited company is your employer the agency cannot pay you directly - they have to pay the money into your company's bank account.

3) Your limited company remains your employer

4) Yes - you take the entire none VAT side of the deemed payment and pay it into your bank account.

In reality you should be using an umbrella firm for all inside IR35 work - deemed payments are restrictive and as you have now discovered both complex and a complete hassle.

[eek]

In his opening post which says 'Limited company (Agency Payee)'

Payee not PAYE - devil is in the detail (and the extra e).

[northernladuk]

Payee not PAYE - devil is in the detail (and the extra e).

Fair enough. Missed that point. Previous posts editted.

[Prab35]

Thanks for your inputs guys.

Choosing an Umbrella is an easy option and they will tell you how much I get net pay if I give my Daily rate. but reason for Choosing Limited company was I have other income coming for different projects which company bid for and choosing inside IR35 Limited company route is a new approach and no clear info available that's the reason I posted here.

Also Agency gave me an option that I can switch to Umbrella any time I want.