Outside IR35 & Self Assessment Outside IR35 & Self Assessment
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  1. #1

    Nervous Newbie


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    Default Outside IR35 & Self Assessment

    Hi folks,

    I just finished my first year as a contractor, and I'm a little confused about how my self assessment should be completed. I operate as a single person in a limited company. I got an SDS from my client in March concluding that I am outside IR35, which I believe means I am considered self-employed in the eyes of HMRC. My accountant believes I should be taking out the minimum amount of PAYE from the company (12.5k?) annually, and the rest out as dividends. She also believes that I should be completing a self assessment form that classes me as an employee rather than self-employed, but I don't believe this is correct as my SDS classes me as self-employed. Wouldn't completing a form that classes me as an employee be contradicting my outside status?

    I have tried speaking to HMRC about this, but their staff are completely clueless when it comes to IR35, which is baffling. I'd really appreciate it if someone could clear this up for me.

    Thanks

  2. #2

    Double Godlike!

    ladymuck's Avatar
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    You are not self-employed in the HMRC sense of the term.

    You are the director of a LtdCo and your remuneration is a combination of salary via a PAYE scheme and dividends. The exact values are unimportant while we just deal with you not understanding the basic fundamentals.

    On your SATR, you will declare both types of income - that received via the PAYE scheme in the employment section, and that received as dividend.

    Your accountant did tell you this but it seems they assumed you had some level.of prior knowledge, of the basic kind people might want to do before setting up a business.

  3. #3

    Nervous Newbie


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    Quote Originally Posted by ladymuck View Post
    You are not self-employed in the HMRC sense of the term.

    You are the director of a LtdCo and your remuneration is a combination of salary via a PAYE scheme and dividends. The exact values are unimportant while we just deal with you not understanding the basic fundamentals.

    On your SATR, you will declare both types of income - that received via the PAYE scheme in the employment section, and that received as dividend.

    Your accountant did tell you this but it seems they assumed you had some level.of prior knowledge, of the basic kind people might want to do before setting up a business.
    My confusion comes from the CEST tool telling me that I am self-employed via the outside determination. Is it the case that from an IR35 point of view I am self-employed, but from a self assessment point of view, I am not? It sounds like a slight contradiction to me. I apologise for my ignorance. I'm a coder, this isn't my forte.

  4. #4

    My post count is Majestic

    northernladuk's Avatar
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    Quote Originally Posted by Blaspheme View Post
    I apologise for my ignorance. I'm a coder, this isn't my forte.
    You are a director of a company selling your services to clients. It should be. The coding bit is easy, even permies can do that.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

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