Tax between Limited and IR35

[teapot418]

Why do you think so, if I may ask please?

The legislation affects all payments from April regardless of when the work was done.

[northernladuk]

Pi has nothing to do with IR35 but yes you've done a lot more diligence than most. Working practices trump contracts which could be a problem with PS clients but there isn't much else you could do TBH.

[londonlad]

Because you and thousands of people will be doing exactly the same with a good chunk of the contractor market no longer being viable.

I have already started my quest for new challenge. I am on weeks notice. So If I find something quicker then I wave by good bye.

Back to my previous question. My contract was reviewed by specialist Qdos and certified as outside IR35 and I work through agency. Moreover, I also have insurance in place to cover tax liability and indemnity insurance for current year. Have I covered my self for the worst case scenario that might unfold in future?

[northernladuk]

Because you and thousands of people will be doing exactly the same with a good chunk of the contractor market no longer being viable.

[londonlad]

I wouldn't have thought finishing week before the legislation kicks in is the best idea either TBH.

Why do you think so, if I may ask please?

[northernladuk]

Yes Chopper, I do know about the new legislation and will be ending my current contract soon (a week before 31st March).

The organisation is proposing me to either go PAYE or brolly. Nope I don't think its good idea...

I wouldn't have thought finishing week before the legislation kicks in is the best idea either TBH.

[londonlad]

You do know that from April there will be no such thing as 'outside IR35' as far as a public sector contract is concerned, don't you? If you're public sector, then you'll be inside IR35. And this will be for any money you are paid in April, even for work you did before April but not paid until after 1st April. (Because they are bastards like that).

There is also a risk that HMRC will decide that if your contract is automatically IR35 in April, then obviously it was inside IR35 before April. Because they are bastards like that.

Yes Chopper, I do know about the new legislation and will be ending my current contract soon (a week before 31st March).

The organisation is proposing me to either go PAYE or brolly. Nope I don't think its good idea...

[chopper]

I don't think I am in grey area as my contract and working practise clearly put me outside.

You do know that from April there will be no such thing as 'outside IR35' as far as a public sector contract is concerned, don't you? If you're public sector, then you'll be inside IR35. And this will be for any money you are paid in April, even for work you did before April but not paid until after 1st April. (Because they are bastards like that).

There is also a risk that HMRC will decide that if your contract is automatically IR35 in April, then obviously it was inside IR35 before April. Because they are bastards like that.

[londonlad]

If you are this concerned do we assume you are in a grey area or considering an inside gig and hoping you'll get away with it?

I don't think I am in grey area as my contract and working practise clearly put me outside. Further more I also have IR35 review from Qdos which clearly deemed me outside.

The reason for the post is curious mind and be ready for all eventuality as we all know how HMRC behaves...

[londonlad]

Means precisely zilch come April.

Sorry, didn't understand what you mean?

[LondonManc]

Thank you guys for some insight.

To provide some context to scenario, I am in current role for less than 12 months (working in public sector). Prior to this I was with another organisation for 2 years again in public sector (worked with 5 different team) and contract renewal at different rates each time.

Also I am insured for current year from Qdos consulting (Tax cover & inquiry policy and professional indemnity).

Thanks

Means precisely zilch come April.

[londonlad]

Thank you guys for some insight.

To provide some context to scenario, I am in current role for less than 12 months (working in public sector). Prior to this I was with another organisation for 2 years again in public sector (worked with 5 different team) and contract renewal at different rates each time.

Also I am insured for current year from Qdos consulting (Tax cover & inquiry policy and professional indemnity).

Thanks

[northernladuk]

Dunno about your number but you've got a case to go on here. In the JlJ split decision he was deemed inside for 4 years of a contract and they wanted £140,000 off him. Dunno how that was broken down but wouldn't be too bad to guess for 2 years in your case you might be looking at a 70k bill if that helps.

http://www.contractoruk.com/news/001...ir35_case.html

Any chance of some context so we might be able to give our view. If you are this concerned do we assume you are in a grey area or considering an inside gig and hoping you'll get away with it?

[Contreras]

It's the net difference.

Effectively everything (CT, PAYE, divvies) is thrown back into the pot and the calculation is made afresh as if the contract earnings (minus allowable expenses) were paid out as salary. The tax liability on your co is then the difference between this and the taxes actually paid by your co and you personally.

Plus interest at HMRC rates.

Plus penalties (in theory, but unlikely in most cases AIUI).

[londonlad]

Hi All

My first post so please go gentle.

So here is my question and scenario. Let suppose I work as limited company contractor earning say £1,00,000/annum and paid £15000 in corporation tax for FY-2016/17.

What if HMRC determine that you were inside IR35 in 2 years time (2018/19) and say you need to pay total Tax and NI as an employee worth £40,000 for FY-2016/17.

So does one pay the balance 25000 (40000-15000) or they need to pay the full amount?
If HMRC determine that you were an employee then you obviously were not limited company. Does one get corporation tax refund?

Thanks in advance.