Calculating tax due on falling foul of IR35

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Hello

Please can someone help me regarding a potential IR35 issue?

If a contractor is deemed to be within IR35, will HMRC always use the deemed payment method to calculate the additional tax due?

If so, will income tax paid on dividends (to the extent the deemed payment doesn’t exceed dividends) and CT on the deemed payment + E’ers NIS on the deemed payment be deductible from the income tax and NI calculated on the deemed payment?

Thanks for your help

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By thomas34
03rd Apr 2018 15:51

Don't understand the question but I've always questioned HMRC's obsession with IR35.

If dividends are to be reclassified as deemed remuneration, then by definition the CT liability will be reduced and a PAYE & NI liability be created.

This will mean an amended personal tax return of the shareholder and presumably an overpayment of dividend tax.

If I was HMRC I know who I'd prefer to be chasing for money - an individual all of whom's assets are at risk or a limited company that could be here today and gone tomorrow. The company liability could make the company insolvent and the directors would be duty bound to wind it up.

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