IR35 offset consultation

[Protagoras]

https://www.contractoruk.com/news/00..._taxation.html

Would dealing with the offset issue result in clients moving away from blanket determinations or blanket bans?

I am inclined to think this will make no difference to client decisions for the simple reason that the client has no way of knowing how much tax the contractor's LtdCo paid on the assignment income. The client is therefore is unable to quantify the offset and therefore the financial risk.

e.g. £100k contract value, LtdCo overall tax paid (roughly) could be between £4k and 40k.

So while this may be 'fair' I'm not sure that it's going to make a difference to clients' evaluation of the risk of offering 'outside' roles.

[jamesbrown]

No, I don't think it will factor into any risk calculations. It's basically to counter the legitimate complaint that the overall tax paid could be more than owed, but also that the contractor could, in principle, end up receiving a refund of the overpaid tax (as reported in the FT in relation to the public sector). This would instead offset the overpaid tax against the FP's tax bill.