Q. I work in the public sector with a day rate for £260 per day. I have been told today that my contract due for renewal 01/04/2017 would be subject to IR35.
I personally do not believe I am subject to this, that is another conversation, my question is how much would this effect me financially?
I am self employed as a contractor through my own PLC.
A. If the public authority deems the contractor to be inside IR35 then the fee payer will deduct basic rate tax & employee’s NIC from the net fee. Provided the contractor does not withdraw profits from their company greater than the net fee received there will be no further PAYE implications for the PSC. At the end of the tax year, the contractor will then complete their SATR & compute their tax liability based on their total income.
Provided the PSC receives no other income in the year that is not caught by IR35, then there will be no C.T implications as the PSC can retain an amount that is not greater than the sum of the net fees salary/dividend costs without further liability to tax.
Clear as mud
Think we need working figures to clarify this explanation …
This may not have been the clearest response. WOudl it be possibel to have a real life example with figures. ie £250, £500 and £650 pd figures, so we can see how aspects are affercted by IR35 and what actual differneces in tax are applied?
This may not have been the clearest response. Would it be possible to have a real life example with figures. ie £250, £500 and £650 pd figures, so we can see how aspects are affected by IR35 and what actual differences in tax are applied?
what is CT? everyone I speak to is confused about the new rules
I am on a new contract starting Monday 3rd April 2017 – inside IR35, i was limited but have been told to go umbrella. it will definitely mean i get less pay. the answer above was awful. we need real life figures