Limited Companies and IR35

RE: Limited Companies and IR35

Alison Clare Hickman — Thu, 27 Sep 2018 17:05:07 GMT

[quote user="robloxley"]I think a lot of what you will pay for is hopefully some indemnity if the advice turns out to be wrong?[/quote] - only if you can sue the accountant under their own Professional Indemnity insurance (if they have it)… Unfortunately HMRC consider any mistakes made (by whomever else) are fundamentally the tax entity's responsibility (ie yours).

Hiring an accountant to take care of your financial and tax responsibilities is something many company directors choose to do. While one would hope that your accountant would strive to do the best for you and your business, occasionally mistakes do happen. An accountant is employed merely as an ‘agent’ of the business to do a particular job; the ultimate responsibility to ensure this job is done correctly lies with the company. This means that if wrong information has been filed, or deadlines have been missed, it is you as company director, and not your accountant, who is liable for these mistakes.

It is important to note that you should only go down this route once you have paid the outstanding amount required by HMRC as it is not possible for you to sue your accountant for loss of funds if you have not technically lost anything.

paraphrased from

https://www.handpickedaccountants.co.uk/articles/accounting/am-i-personally-liable-if-my-accountant-makes-a-mistake-with-my-tax-return

RE: Limited Companies and IR35

Cool — Mon, 24 Sep 2018 16:31:03 GMT

To answer your question contact SJD Accountancy - www.sjdaccountancy.com. you can call to speak to them also. They checked my locum contracts for me.

For me working as a limited company was primarily because my accountant advised so. I chose to be a locum not to avoid tax but because it suits the way i want to work. i have enjoyed my career as vet most while being a locum. not about money or tax avoidance at all.

RE: Limited Companies and IR35

Alison Clare Hickman — Mon, 24 Sep 2018 10:26:28 GMT

https://www.contractorcalculator.co.uk/Docs/20180919-ContractorCalculator-Offpayrollprivatsector-summaryofresponses.pdf

RE: Limited Companies and IR35

Rob Loxley — Fri, 21 Sep 2018 13:39:09 GMT

[quote user="Camilla Edwards"]Or should I just pay out for an expert to tell me?[/quote]

I think a lot of what you will pay for is hopefully some indemnity if the advice turns out to be wrong?

RE: Limited Companies and IR35

Alison Clare Hickman — Fri, 21 Sep 2018 12:27:53 GMT

IR35 currently only applies to the Public Sector. HMRC are looking to bring it into the Private Sector, however there is strong opposition to this at grass root level (and Petitions against its introduction) as the Regulation is considered wholly faulty, punitive and not fit for purpose. It has decimated the NHS locum services...

https://www.contractorcalculator.co.uk/petition_launched_ensure_fairness_all_workers_544410_news.aspx

RE: Limited Companies and IR35

John Wessels — Fri, 21 Sep 2018 12:06:30 GMT

If you are the director and the companies only employee, I don't think you have anything to worry about.

You pay a small NIC amount relative to the small wage you pay yourself(about £750/m and you pay yourself dividend.

Unfortunately you will pay income tax over most of the dividend now...

I worked in this set-up for 20 years, no queries from HMRC.

RE: Limited Companies and IR35

Robert FalconerTaylor — Fri, 21 Sep 2018 10:05:43 GMT

Question for an accountant. From my own experience - I have a Ltd company and I'm the only enployee. Reason? My accountant told me to. As far as I can see - on the -ve it costs more to run (accountant wins on doing both my personal and company tax). On the +ve, the accountant can juggle around at year end with peronal/company tax. Biggest benefits as far as I can see? (A) If I have a really good year followed by a bad year, tax liability can be shifted to even things out. (B) I don't get those awful bi-annual payments in advance as a self-employed person.

I don't generally end up paying less tax, and if I do it's mopped up in accountants fees. But for my situation, (A) and (B) make it worth it - for the time being!

RE: Limited Companies and IR35

Iain Richards — Fri, 21 Sep 2018 08:33:05 GMT

Any thoughts anyone? I'm puzzled by this. I can see where IR35 legislation comes from - too many folk set up Ltd Co and avoid tax. If I compare what I paid as sole trader/partner to a director, you can see why it was introduced.
What puzzles me however is that using an umbrella company seems to push a locum firmly in the direction of an employee. I understand some large corporates will only invoice through an umbrella company. Are they not adding costs (agency fee plus umbrella fee) to themselves? Do they also do this with local eg builders who are Ltd Co?

Despite reading up, I'll still lost!