Рет қаралды 2,501
A Contractor working through a Limited Company should learn about IR35 which has been in existence since 2000. IR35 refers to a hypothetical contract between the Contractor and the client and this then affects how much tax is payable. If it is decided that the contract would be more like employment, rather than self-employment, then the Contractor is caught by (fails) IR35. The Contract (sales) income is then treated as salary - and PAYE and National Insurance is deducted. If the Contractor is not caught by IR35 they can pay themselves just as any Company would, ie. taking a small salary and paying Dividends, splitting Dividends with a spouse and getting tax relief on expenses. All of these reduce the tax paid.