IR35: A taxing question
I recently tried to work out actual tax liability of a personal company with 31 March year end.
As the deemed salary assessment was after 31 March, namely 5 April, for the same year’s profits, the only way was to have two corporation tax computations: one with the normal Sch D Case I computation and second one with the deemed salary computation the next year.
When I faxed my calculations to the Inland Revenue helpline, the inspector was not able to comment on the calculations. The rules are unworkable under current legislation.
Contractors are much more enterprising and take far bigger risks than employees. The government is effectively stifling enterprise. It takes a lot of guts to be self-employed and their rewards have historically been greater than employees to compensate them for the risk they are taking.