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IR35 and spreadsheet

IR35 and spreadsheet

Hi

I was wondering if anybody had an IR35 deemed payment spreadsheet and CT600 proforma calculation

Seems a bit cheeky I know but I do not deal with these type of clients and have suddenly got to do so unfortunately.

Is there any rule of thumb calculation for taking money out of the company whilst leaving enough in to pay the tax/NIC on the deemed payment - assuming a basic salary of £7475 is being paid??

Any practical advice will be very welcome - for example is it better to have a bigger or smaller salary subjext to PAYE in the normal way?

Thanks to all on the forum in advance

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18th Oct 2011 09:32

HMRC has it's own free deemed payment calculator spreadsheet - if that's of any help to you:

www.hmrc.gov.uk/ir35/ir35.xlt 

 

Louise
www.figurate.co.uk
www.happyaccountant.com

 

 

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20th Sep 2011 14:21

Rule of thumb

Never, ever, have "deemed" payments.

Do the IR35 calculation and credit the DLA (assuming the worker is a director) with the total net pay; charge the amounts he has actually drawn to the DLA.

Why would he pay £7,475 a year, thus requiring quarterly payments of NIC to HMRC?  Paying anything between £5,305 and £7,072 involves no PAYE payments (and hence, no possibility of surcharges for paying them late), but still makes it a qualifying year for state pension and other benefits.

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justsotax
20th Sep 2011 15:01

I thought director's paid NIC on an annual basis

I thought a payment of £7,475 would result in only one (monthly) payment of NIC - for the month of March as that would be the point when they went over the annual limit.

Now worrying that this is different for primary and secondary class 1 contributions.

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lisler
20th Sep 2011 16:36

@Discountants

Discountants wrote:

I thought a payment of £7,475 would result in only one (monthly) payment of NIC - for the month of March as that would be the point when they went over the annual limit.

Now worrying that this is different for primary and secondary class 1 contributions.

Yes - you're absolutely right for a director.  So, no risk of surcharges, but why bother having to pay any PAYE even once a year?

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21st Sep 2011 09:24

@ Euan

Surely he will have to pay PAYE at least once a year anyway?

Unless you have worked out a way to have the PAYE/NIC on the deemed payment cancelled? :-)

Also, would ur way not give rise to a beneficial loan benefit as there would be an overdrawn loan account >5K ?

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21st Sep 2011 10:32

@JCresswell

The OP's mention of paying £7,475 in an IR35 situation was a red herring and my response to it was intended as no more than an aside, but it seems to have gone on to dominate this thread.

My basic advice is to calculate the PAYE due under IR35 at least quarterly, pay it over to HMRC and pay the net amount resulting to the worker (or credit to his DLA, against whatever drawings he may have made).  This includes the last quarter of the tax year, so that there is never a balance of "deemed" payment due.

This mechanism is not going to result in an overdrawn DLA unless you are going to be very pedantic and argue that drawing monthly, but only processing salary quarterly, could result in an overdrawn DLA in the first 2 months of the quarter - I would argue that despite only being calculated quarterly, the salary should be spread over the months of the quarter.

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By spayne
27th Sep 2011 11:21

Thanks

I will have look at these postings later

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