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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4715
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I'm currently working as a consultant to various customers,

Customer Question

Hi,
I'm currently working as a consultant to various customers, one of which is based in Denmark, I have a current client base of 5 customers, I operate as a VAT registered Ltd company paying myself a salary plus dividend, is this correct or should I pay as IR 35.
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
You are correct in the way you are paying yourself as you are drawing a salary from your LTD company that has more than once customer i.e. your company is not contracted to one company only and is offering consultancy services to customers. I presume your company has employer/public liability and professional indemnity insurance cover in place.I hope this ishelpful and answers your question.If you have any other questions,please ask me before you rate my service – I’ll be happy to respond.
Expert:  taxadvisor.uk replied 1 year ago.
Colin, from what you have described, your set up would meet the definition of "self-employment and therefore IR35 rules should not affect you.

You may find this guide helpful.

http://www.contractoruk.com/documents/CUK_HowToAvoidIR35.pdf


I hope this is helpful
Customer: replied 1 year ago.

Thank you for your quick response, very much appreciated.

I have been reading various online documents and to say I'm confused is an understatement (although tax is not my specialist field :-).

One thing I need to add is that my Danish customer has recently set up an office in the UK as a Ltd company, a wholly owned subsidiary of the Danish parent, of which I am a Director but I don't take a salary or payment from this UK Ltd company, they do have UK employees. Does this effect anything ?

Expert:  taxadvisor.uk replied 1 year ago.
Colin, thank you for your reply.

It should not affect anything or exposure to IR35. You should be mindful of the fact that the Danish customer with a UK office in which you are a director would have to disclose the fact that they are dealing with a company in which you have an interest.

You would also have to make a disclosure of interest in your company's accounts. Your accountant would best guide you on the notes to the accounts in this matter.

I hope this is helpful and answers your question.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it by Just Answer.

Customer: replied 1 year ago.

Hi

Sorry for the delay in replying, one more thing, would it be possible to get to get a statement to this end on an official letter head, as a proof to clients that the way I operate is correct, some clients want me as an employee, however that cuts my field of client base as a number of my clients are competitors, as soon as I become an employee the non-competitive clauses in contracts can be implemented

Expert:  taxadvisor.uk replied 1 year ago.

Thank you for your reply.

 

I think you can use your own letterhead that shows your company name, registration number and registered office address. You could add the company's UTR to confirm the company is accounting for taxation as an independent entity and also your company PAYE reference number.

This should suffice.

I hope this is helpful.

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