IR35 and accounts
Can one tell from a profit and loss account if a company was caught by IR35?
If a company has a profit and loss account as follows (this was filed):
1.11.01 to 6.10.00 to
31.1.03 31.10.01
Turnover £92,640 £81,780
Administrative
Expenses £78,418 £78,053
Operating Profit £14,222 £3727
Interest £ 16
______________________________________
Profit before tax £14,238 £ 3,727
Tax on profits £ 1,086 £ 258
Profit after tax £13,152 £3,469
Dividends £16,620 £ 0
___________________________________
(£3468) £3469
Retained
Profit B/F £3469 £0
______________________________________
Retained Profits C/F
£1 £3469
______________________________________
Note: Directors' remuneration
67,854 67,712
THE COMPANY APPLIES TO BE DISSOLVED.
Sales results from one IT contractor working at one client for the duration of the entire period.
Combined turnover for the period is £174,420
If 5% is allowed for expenses (IR35) that is only £8721
How can the company declare £16,620 as a dividend and claim it was caught by IR35?
Is it something to do with taper relief?
I suspect fraud.
The main question is: Do the accounts indicate that the company claims it was NOT caught by IR35?
Note: This is not my company!
Sorry, I cannot format this document correctly using the site's text editor!
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Mark Brown