An IT contractor has set up his own company and works for a recruitment agency on a public sector contract. The agency deducts PAYE and NIC as assignment considered within IR35 and then pays the net wages to the contractor's company. He then draws this money out of his own company.
Question: How should this be correctly accounted for in the contractor's company? Do the net wages paid in just go as a credit to the director's loan account, which he then withdrawals out because all the income has already been taxed? ie nothing goes then to sales? The director receives a P60 from the agency so that just goes on his own self assessment return.
Thank you for any assistance