IR35 Deemed Payment

Psyche

Hello there,
I have a client who apparently is running afoul of the IR35 rules.
I have consulted the HMRC website about how to calculate the deemed payment but the bit that seems to be missing is what taxes are payable on the deemed payment? Does he owe PAYE, Employee's NI and Employer's NI? Also does he pay the tax or does the company? He is an IT consultant operating as a one-man limited company, and so far has taken a nominal salary and the rest in dividends.
Thanks for any help!

~Psyche

Bluewednesday

the deemed payment is taxed and ni'd and the employers ni that you used to get the deemed payment is also payable. This is taxed on him, not the company.

Who has decided that he's caught by IR35?

Psyche

His agent said that IR35 applies to him, but I am going to have him send me his contracts and discuss with HMRC to make sure.

Bluewednesday

We have had one recently who was touch and go and we had hte contract reviewed by either Abbeytax or accountax who are recommended by PCG (Professional contractors group). it is worth joining them also as there are a few benefits of membership.

It's worth having a look at their site, the one we were looking at would have had a paye bill of £50k should they have been caught by it!!

groundy

Agree with bluewednesday, try Accountax, we go on their courses once a year and also use their contract review system. The last thing you should be doing is consulting on his contract with HMRC.

deanshepherd

Shameless plug: We also do IR35 contract reviews. Feel free to contact me if you are interested.

taskey

so thats what you look like Dean

Tracy

deanshepherd

No, that's a paid actor used for the website. I'm much better looking!