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Sam, Accountant
Category: Tax
Satisfied Customers: 14164
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I'm a contractor with my own company who has been operating

Customer Question

I'm a contractor with my own company who has been operating outside IR35 for 15 years
I was recently urged to sign a form declaring that I am in IR35 to
ensure my contract wasn't cancelled on a government project.
I was told IR35 would only effect me if I paid myself in dividends (which I don't)
I've now found all subsistence payments, including London temp accommodation costs must
be paid out of the salary I pay myself
- rather than go through the company as expenses -
which is an impossibility
Could you tell me what my options are?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question - I am Sam and I am one of the Uk tax experts here on Just Answer. The advsie you have been given is not strictly correct - any expenses payments you take (from the company) would have tot be presented to HMRC through form P11d (with the annual P11db return) - for HMRc to treat as taxable - but if they arise wholly and exclusively in the performance of your duties then you then apply a Section 226 claim to ask for them to mitigated from tax. Or you can pay (suffer) them from your salary and then make a claim for expenses, to state they are wholly and exclusively arising through the course of your duties as an employee (director) on your self assessment tax return. I am not sure why you state this is an impossibility - as one would assume you run a normal limited company as a contractor with many clients - or then you are at risk of falling foul of HMRC and the legal position of where it not for the limited company would you in fact be an employee (or subcontractor) to just one contractor. But you seem to indicate that HMRC have sanctioned you operating outside of IR35 (and this is why the recent project needed to you state you are in IR35 - as they would have concerns too it would seem) and you are wrong that your exclusion to pay yourself dividends in itself would affect you re IR35 - you have been misinformed - so you may wish to ask HMRC to review your position. Let me know fi I can assist furtehr re the expenses element ThanksSam