IR 35 deemed payment

IR 35 deemed payment

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I am used to clients falling outside IR 35, but I am due to meet a potential new client who does actually fall within.  She has moved house and wants a more local accountant, so she may be prepared to disclose what she is has been paying, but I am finding it a little difficult to come up with a price at the moment.  (I know some of you say don't attempt topics you are not familiar with, but I am educating myself.)

The client does their own VAT, but wants accounts, CT return and deemed payment calculation.  I don't yet know who does PAYE, if at all.

Would any of you kind souls be willing to share a ball-park fee with me?

Many thanks

Replies (3)

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By andy.partridge
06th Feb 2012 17:18

Deemed payment

Hello Dianne

If I were you, purely from the point of quoting a fee, you might first consider what your fee would be if the client fell outside of IR35. You can then consider adding a supplement for the additional IR35 element to your service. This might be so simple that adding an hour or two's worth of fee might be sufficient, but only from a meeting with your client will know if the affairs are more complicated (or if your client has somehow made them more complicated!). 

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By Sheepy306
06th Feb 2012 18:56

How about £500 for accounts and CT return plus whatever you think is a fair amount for deemed calculation based on your hourly rate?

That's probably a decent fee for a small sole trader. That is of course on the basis that's the records are of fairly decent quality and no involvement in PAYE and no major hand-holding during the year.

Would be interested what others thoughts are.

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Euan's picture
By Euan MacLennan
07th Feb 2012 10:06

Do not do deemed payments

Recovering the tax on deemed payments is so complicated that you should avoid deemed payments completely.

The solution is simply to calculate the salary payable under the IR35 rules and then actually pay that salary.  If the client's PAYE would amount to less than £1,500 a month, you need only do the calculation quarterly (and even if it doesn't, you could probably get away with still doing the calculation only quarterly, but paying estimated amounts of PAYE monthly).  All you need to perform the IR35 calculation is for the client to tell you her company's income (excl. VAT) from her work and her mileage or other travel expenses (excl. VAT).  Take you less than half an hour to do the calculation each time.

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