Net or Gross Pay?
Client worked for limited company and was paid £2k per month 2004/05 to 2007/08. He included this in his self-employed income.
Following a wages inspection, the Inspector refused the "employer" company any offset of the D1 tax paid by our client against the employer company's PAYE liability. (In other words, the Inspector's applying Demibourne treatment). That leaves our client eligible to reclaim D1 tax and class 4 NI paid on that income, given that the company are now liable.
Last time I had a similar case I remember treating the (say) £2k as net pay. But I'm receiving general hints by the (DPA-bound) Inspector's staff that I should treat it as gross pay. Can anyone please tell me which? I've been scanning through the Income Tax (PAYE) (Amendment) Regs 2008 - the legislation laid to overcome Demibourne - to look for any changes that might dictate that pay deemed to be employment income should nowadays be treated as gross (even though the Inspector has found a reason not to apply a Demibourne-like direction in this particular case).
£2k per month net or gross?