Are you outside IR35 if you already pay full NI and tax? Are you outside IR35 if you already pay full NI and tax?
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  1. #1

    Nervous Newbie


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    Cool Are you outside IR35 if you already pay full NI and tax?

    Regardless of your contract
    - If your Ltd makes 100k a year
    - Your expenses are 10k a year, paid by your Ltd
    - And you draw the remaining salary of 90k a year, paying the corresponding NI and income tax due

    Are you less of an interest for ir35 investigation? Or is it more about your contract than your self-assessment?

  2. #2

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    Why would you even do that?
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    Prof Cunning @ Oxford Uni

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    Does this relate to your other question about trying to get travel costs if you switch from contracting to permanent?


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  4. #4

    TPAFKAk2p2

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    Quote Originally Posted by forumuser View Post
    Regardless of your contract
    - If your Ltd makes 100k a year
    - Your expenses are 10k a year, paid by your Ltd
    - And you draw the remaining salary of 90k a year, paying the corresponding NI and income tax due

    Are you less of an interest for ir35 investigation? Or is it more about your contract than your self-assessment?
    Technically you still need to consider IR35. If "inside" then T&S expenses are not allowed.

  5. #5

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    Quote Originally Posted by forumuser View Post
    Regardless of your contract
    - If your Ltd makes 100k a year
    - Your expenses are 10k a year, paid by your Ltd
    - And you draw the remaining salary of 90k a year, paying the corresponding NI and income tax due

    Are you less of an interest for ir35 investigation? Or is it more about your contract than your self-assessment?
    A contract is inside or outside IR35, not a person.
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  6. #6

    Contractor Among Contractors


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    I don't disagree with the posters above...but from a practical perspective, if you're basically declaring yourself outside IR35 whilst voluntarily making "bad" choices which mean you pay virtually all the tax you would have done if inside IR35, then I'd agree you're very unlikely to be challenged. Why would HMRC bother if there's negligible extra tax at stake. It's not technically "right", but I don't necessarily think it's a bad idea, indeed we've suggested it for a couple of our clients at times.

    It's a little bit like claiming a very contentious business expense. If it's a tenner, who cares...it may be wrong, but it's not worth wasting time arguing about it. If it's £10k on the other hand, it is worth taking more care to ensure it's dealt with properly.

  7. #7

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    One could argue you're very unlikely to be challenged if you declare yourself outside IR35 anyway.

    Have HMRC investigations ramped up now they only have to investigate a small number of 'rogue' contractors not already inside IR35 in the public sector, and likely same when it is applied to private sector so their investigators have a smaller pool to investigate.

    Hopefully there will be a high enough percentage automatically inside IR35 that HMRC makes all the IR35 investigators redundant or moves them onto something else.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

  8. #8

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    Quote Originally Posted by Maslins View Post
    Why would HMRC bother if there's negligible extra tax at stake.


    Isn't that the whole point of IR35 - HMRC bother for negligible extra tax?

  9. #9

    Contractor Among Contractors


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    Quote Originally Posted by DeludedKitten View Post
    Isn't that the whole point of IR35 - HMRC bother for negligible extra tax?
    Ummm...quite often there is a huge amount of tax at stake with IR35 cases?

  10. #10

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    Quote Originally Posted by DeludedKitten View Post


    Isn't that the whole point of IR35 - HMRC bother for negligible extra tax?
    Quote Originally Posted by Maslins View Post
    Ummm...quite often there is a huge amount of tax at stake with IR35 cases?
    The main point of IR35 is probably to scare contractors into brollies.
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