November 22nd - The death of contracting as we know it

[jamesbrown]

I see they punted the abolition of Class 2 NICs for sole traders to 2019, so a 148 quid per year non-tax cut (good day to hide bad news).

[SueEllen]

Maybe we need a "What news UK government departments are burying today" thread.

[poorautojobber]

If HMRC have conveniently ignored elements of the law (MoO) in creating CEST then why has there been no legal challenge issued? Is it because Hector claims it is only an "advisory" tool? They cannot claim it is only advisory but also claim to stand by the output/decision.

One of the doctors unions (?) Is in the processes of planning an application for judicial review I read somewhere. They have a consultant who has 8 outside decisions from various review services but CEST say's no. I have a feeling the dimwit clicking the boxes hasn't got a clue what they are doing.
Theirs a real body of cases coming through now that seem to prove its not fit for purpose.
How long before the penny drops at HMRC towers? Probably never they've got ministers calling out the 'unfair' tax advantage to line up the changes they'll have to save face.

[WordIsBond]

Just so I am clear, if I was IR35 caught could I pay myself and my wife an income? Or do I have to pay it all as income to me?

If inside it's your salary so it has to be paid to you - no income splitting with the wife.....

To be pedantically precise, he can pay his wife a salary if he wants (she'll take it all eventually anyway ). He can pay a salary to his next door neighbour for walking his dog if he wants.

But he has to pay personal income tax and NI on the deemed payment, either way. They don't care what he does with the money that is left after the deemed payment is made.

[BrilloPad]

To be pedantically precise, he can pay his wife a salary if he wants (she'll take it all eventually anyway ). He can pay a salary to his next door neighbour for walking his dog if he wants.

But he has to pay personal income tax and NI on the deemed payment, either way. They don't care what he does with the money that is left after the deemed payment is made.

So if I am inside IR35 and pay myself just below the upper tax limit and my wife just below the upper tax limit, then no upper rate tax is paid?

[mudskipper]

So if I am inside IR35 and pay myself just below the upper tax limit and my wife just below the upper tax limit, then no upper rate tax is paid?

No. You have to apply the deemed payment calculation to the income from the engagement for each worker (fee earner) proportionally. So you can't save tax by paying your wife a salary.

[eek]

To be pedantically precise, he can pay his wife a salary if he wants (she'll take it all eventually anyway ). He can pay a salary to his next door neighbour for walking his dog if he wants.

But he has to pay personal income tax and NI on the deemed payment, either way. They don't care what he does with the money that is left after the deemed payment is made.

When it comes to tax please don't be pedantic as it usually causes confusion to most people. Keeping what we say simple means that things we suggest aren't likely to come back and bite them later...

[WordIsBond]

When it comes to tax please don't be pedantic as it usually causes confusion to most people. Keeping what we say simple means that things we suggest aren't likely to come back and bite them later...

Fair enough. It's good to be very precise with tax but in this case it added nothing, so your point is well taken.

[lucyclarityumbrella]

When it comes to tax please don't be pedantic as it usually causes confusion to most people. Keeping what we say simple means that things we suggest aren't likely to come back and bite them later...

Does this help... inside IR35 = PAYE on all income only tax saving is pension or childcare if operating via a brolly!

[TheFaQQer]

Does this help... inside IR35 = PAYE on all income only tax saving is pension or childcare if operating via a brolly!

Minus 5% expenses?