Employee Alternatives for Automobile Insurance Through Payroll Deduction

IR35 has added to the complexity of taxation legislation and forced many more contractors to seek specialist tax advice. The PAYE system is a method of paying income tax. Wages includes sick pay and maternity pay.

Your employer is responsible for sending the tax on to HM Revenue and Customs (HMRC).

Personal Service Companies (PSC) / Limited Companies

In the past, contractors used this method to exploit tax loopholes and improve tax efficiency. Contractors set up a limited company and pay themselves via a minimum wage and dividends.

Contracts inside IR35 dividend payments are simply NOT viable anymore. HMRC view minimum wage/dividend options as tax avoidance and may impose PAYE.

Outside IR35: if a dividend payment takes a contractor over the 40% tax threshold they will face an end of year tax liability.

Umbrella Company

There is no legal or tax law definition of the word "composite company".

A mixture of salary ; dividend payments now, could be viewed as blatant "tax evasion" by the HMRC, according to section 447 ITEPA, 2003:

-Company provides administrative services, invoicing and receiving payment for work carried out - eases burden for contractor.

-Contractor paid a small salary plus expenses, remaining income paid via dividends.

Offshore Schemes

The Inland Revenue's Special Compliance Office is gearing up for a crackdown on offshore umbrella companies and other tax avoidance schemes designed for solo contractors caught by the unpopular IR35 legislation.

Payroll Solutions - A Contractors Guide

Payroll deduction involves having your monthly payment deducted from your paycheck before you are paid. In the United States, payroll deduction is commonly used to pay for health and life insurance. Payroll deduction is now available to some customers as a way to pay auto insurance.Payroll deduction of automobile insurance premiums is relatively new and is not offered by all insurers. Payroll deduction is most commonly available to employees who purchase employer-sponsored insurance. Utilizing payroll deduction for your auto insurance ensures that the monthly payment will never be forgotten. Payroll deduction is not for everyone.