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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15917
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a director of limited company currently contracting,

Customer Question

Hi,
I am a director of limited company currently contracting , also i got a permanent opportunity with another employer. I had taken P45 from my limited company and on payroll with the permanent employee.
As i am having earning from my limited company through contracting which is VAT registered
and
salary from permanent employee (NI and PAYE is deducted from this employee).
How should i be paying tax to be compliant with HMRC .
Can you please give me your number so that i can call you.
Thanks
Submitted: 10 months ago.
Category: Tax
Expert:  TonyTax replied 10 months ago.

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Expert:  TonyTax replied 10 months ago.

I cannot give you my phone number but if you want a telephone call it does incur an extra charge. Can you tell me how you wish to proceed?

Customer: replied 10 months ago.
First give answer my question in mail
Expert:  TonyTax replied 10 months ago.

OK.

I'm not clear on what you perceive the problem to be given what you have said. Can you elaborate a little please.

Customer: replied 10 months ago.
I am director of limited company which is VAT registered still doing contracting work. Took P45 from my company so not taking any salary as paye.I also working simultaneously as permanent employee for another company taking salary.Need advise how should I be paying my tax on the earning which I have through my limited company? Is it legal as per HMRC to be working that way ?
Customer: replied 10 months ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  TonyTax replied 10 months ago.

Thanks.

I'll type my answer and them you can decide whether you want a phone call.

Customer: replied 10 months ago.
OK please type the response
Expert:  TonyTax replied 10 months ago.

There is nothing wrong with having your own company and working for another employer at the same time. You simply hand your P45 from your own company to your new employer who will use it to work out the tax and NIC you pay on your earnings at that company. The money your company is earning from contracting is the company's money and you will only have tax to pay if you take dividends from the company and that tax you will pay after the end of the tax year through your self-assessment tax return. I have clients who have run their own company's who have taken a job working for someone else whilst their own company is still active so its not uncommon at all. Many directors take dividends as opposed to salary. That is legitimate. If, however, you are concerned about IR35 compliance, you should consult your accountant. The fact that you have take another job changes nothing as far as your own company is concerned.

I hope this helps but let me know if you have any further questions.

Customer: replied 10 months ago.
IR35 compliance what does it mean by. What things should I check with my accountant
Expert:  TonyTax replied 10 months ago.

Can you tell me whether your own company has more than one contracting client please.

Customer: replied 10 months ago.
only one client at the moment for my limited company.
Expert:  TonyTax replied 10 months ago.

Thanks.

There are some notes on IR35 here. It is far too complex a subject to go into any detail on here but the notes give you an idea as to what HMRC are looking for. Whether your own company would be caught by IR35 depends on your company's relationship with your contracting client. This is why I asked you at the beginning what you felt your problem was because if you think there is a problem simply because you are running a limited company as well as working as an employee for another company, I can tell you that there is no such problem. Your accountant will tell you that.

Customer: replied 10 months ago.
I am a IT contractor my agency recruited for me for a bank. I raise invoice for the contract work I do with my limited company. It's been happening for more than 1 year.
Expert:  TonyTax replied 10 months ago.

Hopefully, the contract between your company and the bank has been drawn up to be compliant with IR35 so as not to cause you a tax and NIC problem. However, it would be worth having an expert on IR35 compliant contracts take a look at it. There is some guidance here.

Expert:  TonyTax replied 10 months ago.

Hi.

I'm just following up to find out if my answer helped or if you have any further questions.

Customer: replied 10 months ago.
Hi I have checked with my accountant she said I will be compliant as am a contractor not an employee. Just for peace of mnd with your experience can you check my contract agreement, I can attach the contract agreement.
Expert:  TonyTax replied 10 months ago.

I'll take a look if you upload it.

Customer: replied 10 months ago.
I will upload hope the data I share is confidential and is only visible between both of us.
Expert:  TonyTax replied 10 months ago.

I would suggest you blank out names.

Customer: replied 10 months ago.
Hi Tony, I am blacking out my contract agreement and will send you shortly. In the meantime can you check my payslip from my new employer which he given me. can you check if the income tax , employee NI , employer NI has been deducted correctly please ?. Also Is there any way i can check if my employer paid the taxes to HMRC which is shown on my payslip please ? My annual Gross salary is 45000 pounds per annum.
Expert:  TonyTax replied 10 months ago.

The tax and NIC deductions are fine. If you call the tax office I don't think they will tell you whether the deductions have bee paid over to them as the deductions they pay over won't only be for you if there are other employees. Even if they didn't, you will get credit so keep your payslips.

Customer: replied 10 months ago.
Thank you. I came to know now the payroll system is online , the moment payslip is generated automatically hmrc will know how much tax the employer has to pay for that employee and the employer has to pay the Ni and paye tax every month ?cannot I not check the status by telling hmrc my tax code.?
Expert:  TonyTax replied 10 months ago.

That's correct. The figures have to be reported on the payday. I've never tried it so all I can suggest is you call the tax office and ask them.

Customer: replied 10 months ago.
Trusting you attaching the contract as it is :) please check if its IR compliant.
Regarding the payslip will i be held accountable to HMRC for paying taxes if my employer avoids paying tax ? sorry for asking so many questions as i am new to this taxations in uk :(
Expert:  TonyTax replied 10 months ago.

I'll look at the contract tomorrow.

You can't be held accountable for PAYE deductions not paid over to HMRC.

Customer: replied 10 months ago.
Thank you good night
Expert:  TonyTax replied 10 months ago.

Good night.

Customer: replied 10 months ago.
Hi Mate,Any luck have you got chance to look at my documentThanks,
Expert:  TonyTax replied 10 months ago.

I have to say I'm not an expert on IR35 contracts or how they are put together but based on what I do know from seeing contracts and from what I've read in the past such as what is here I cannot see any problems.

TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 10 months ago.
thank you mate appreciate your support :)
Expert:  TonyTax replied 10 months ago.

Thanks and good luck.

Customer: replied 10 months ago.
Just a small understanding what is taxable gross pay 7500 income on my payslip which I shared how did it came. My total yearly gross pay is 45000.
Expert:  TonyTax replied 10 months ago.

You earn £3,750 per month before tax. I can only surmise that your gross pay to date is £7,350 because your first month was slightly less than a full month.

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