Should the Taxman ever come a-calling claiming my contract is within IR35 and raises an assessment, would all taxes already paid which were generated from the contract so far be taken into account?
I’m thinking Corporation Tax and Income Tax paid on dividends (not forgetting the 20% irrecoverable VAT on a finance industry contract but let’s exclude that).
If my contact earned say £50K fees, PSC pays circa £10K corporation tax and pays out 100% of what’s left in divis, then I calculate a total tax bill of around £11.9K. If the £50K has been earned as an employee, I would pay around £10.9K in tax and NI (oversimplification granted).
Same assumptions on £100K gives me £29.2K total tax PSC route and £32.5K employed. So would the Taxman just come after the difference?
I’m thinking Corporation Tax and Income Tax paid on dividends (not forgetting the 20% irrecoverable VAT on a finance industry contract but let’s exclude that).
If my contact earned say £50K fees, PSC pays circa £10K corporation tax and pays out 100% of what’s left in divis, then I calculate a total tax bill of around £11.9K. If the £50K has been earned as an employee, I would pay around £10.9K in tax and NI (oversimplification granted).
Same assumptions on £100K gives me £29.2K total tax PSC route and £32.5K employed. So would the Taxman just come after the difference?
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