Do I need to run a company payroll?

Client is contracting under Capita through his own limited company. Is a payroll necessary

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Client is a contractor. His services are being paid for by Capita. He has been offered 2 options - One the umbrella route where a payment will be made to him personally or two a payment into his personal company. Under both options it seems that Capita will run a payroll using HMRC tax codes and the client will receive a P60. The client's personal company is currently running a payroll and I need to understand whether or not to close this. If I continue to run it, it seems that the client will be taxed twice on PAYE. If I cease the payroll and the client wants to withdraw his money from the company it seems to me that the withdrawal will have to be treated as a dividend (and so taxable to personal tax). Do you all agree? I'm being asked which route the client should take (ie umbrella/ payment into a limited company).  With a limited company route potentially he could get entrpreneurs relief going forward if the company was closed but other than that I really can't see alot of benefit in using his company. Am I missing something? TIA 

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By Duggimon
07th May 2020 08:53

The client won't be taxed twice, the payment already taxed at source can be paid to him as salary or a deemed dividend with no further tax applied. If you are going to continue to act for him as he moves under IR35, you really need to study up on how the tax and accounts are prepared under the legislation as I think you have some misconceptions you need to shake off.

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Replying to Duggimon:
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By Sandnickel
07th May 2020 12:48

How bizarre, I replied to this question this morning (basically what you put Duggimon) but it hasn't appeared!

Feel a little miffed.

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