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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have been offered a contract weeks, paying £180

Customer Question

Hi,
I have been offered a contract for 8 weeks, paying £180 per day, the job is via a recruitment agency and the amount will be paid into my limited company. I have my own limited company which has not traded for over 6 months as I am actually taking time out after having my daughter and was not planning on returning to working until May 2016 but could not really turn this opportunity down for professional reasons.
This will be a one off contract this year and I am confused to where I stand under IR35 and also PAYE? I am certain that I will not do any further contracts this year as we are going to Dubai for 12 months in July with my husbands job and I will not have work visa there.
The recruitment agency are asking my to give them a letter stating that I will be paid via PAYE by my limited company, is this what I need to do as from a personal stand point I will be below the tax threshold for the year and also I have expenses to take out?
I hope that this does make sense?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
IR35 kicks in where, if one is paid through a personal service company, one could be regarded as being in a PAYE relationship with that company. It is an anti tax avoidance or even evasion measure.
Whilst your net emoluments from the company will be below the tax threshold IR35 would still apply, but its imposition would have no effect as operating PAYE would be an exercise in financial futility as no tax would be due. Soft, there may be NI contributions here which kick in at GBP 486 per month and may make operating PAYE under RTI a requirement; a point to consider.
Expenses you take out from your company in the normal way by means of reimbursement. Always ensure that these are fully vouched to preclude any later inquiry. Your emoluments will, presumably, be net of these expenses.
You should, if necessary, see my NI guidance above, be operating PAYE. Although I appreciate that if you are below there is nothing to do. You should have no problem in issuing a letter from your company ensuring the employment agency that your emoluments will be operated within the PAYE regime.
I do hope that I have been able to give you some guidance as to the way forward.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.
Expert:  bigduckontax replied 2 years ago.
And your generous bonus.

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