IR35 - prevention of double taxation claim

An individual can claim a deduction from their taxable income where it includes a deemed payment of salary under the IR35 rules and the same income, or part of it, is in the same or a later year, taxable as dividend income. This prevents the income from being taxed twice. The deduction is made from the dividends income, not the deemed payment.

How to claim

A claim for relief under s.58 Income Tax (Employments and Pensions) Act 2003 needs to be made within five years from the 31 January following the date of the deemed payment, e.g. if a deemed payment applied on 5 April 2022, a claim must be made by 31 January 2028. Where a self-assessment tax return has been submitted, the claim is made within the amendment window for that return (usually one year from the normal filing date of the return). If a claim is made later than this, it should be incorporated in a claim for overpayment relief.