How much is Katie Price earning to owe HMRC so much?

[UniqueCrow]

My understanding is that she owes hmrc £750k. Ok I'm sure there are penalities etc but surely everything is done via her company etc so she's paying minimal tax etc.... but who's actually paying her to do anything?

I don't think she's done anything other than books, perfume, game shows, tv etc.... And spent loads on her boy etc, but the past five years I don't think she's done anything note worthy? Everything seems to be for free and online, eg newspapers etc.

When you're self employed you get paid gross i.e. all the money agrees in the contract is paid to you, then paying tax on all your earnings to HMRC is for you to sort out.

Here's an example:

Let's say IACGMOOH pays KP £200,000 for one series.

Of that, the first £50.270 will be taxed at 20% = £10,054.

Between £50,270 and £125,140 will be taxed at 40% = £74,870 x 40% = £29,948

Anything over £125,140 will be taxed at 45% = £74,860 x 45% = £33,687

So from a £200,000 payday, KP should have held back £10,054 + £29,948 + £33,687 = £73,689 to pay in tax

She would also have to pay NI:
6% for earnings up to £50,270 = £3,016.20
2% for earnings over £50,270 = £149,730 x 2% = £2,994,60

NI total = £3,016.20 + £2,994.60 = £6,010.80

So KP should have held back £74k + £6k = £80k for Tax and NI

My numbers are probably slightly out, but it would mean of the £200k earned, KP would only have £120k to spend on staff and her family expenditure. I'm guessing she spent much more than that, looking at her lifestyle.

I suspect she had an accountant to tell her all that this, but unless she provided the accountant with the cash to pay HMRC, the accountant would not have been able to pay the bill to HMRC.

On these kind of sums, fines and penalties rack up very very quickly.

Also, there is legislation which someone me ruined an example of above called IR35. It is designed to catch those people who are employees, but disguise themselves as companies to avoid PAYE and NI.

Anyone who worked for KP full time and was paid gross (without Tax and NI deductions) would fall foul of this legislation.

The onus is on the employer, i.e. KP, to make PAYE and NI deductions from disguised employees. If they don't and HMRC catch you, again fines and penalties can be steep depending on how far HMRC go back in your records.

*which someone mentioned above

And if they are deemed as part of her income then she passes some on to her 'employee entourage' they potentially become benefits in kind with tax to be paid.

I'm sure HMRC are good at spotting this and following the trail.

She's a huge draw for The Sun and The Daily Mail and gets revenue for photos and stories of her on holiday and being spotted out and about.

I read her mum's book. Her mum claims that KP's brother used to do her accounts. However, when KP married Kieran Hayler, he took over the accounts and didn't keep money aside for VAT etc, which is how the financial mess stated.

At the end of the day though, it's Katie's company, and she is liable for the tax debts, not any of the employees. It's part of the parcel of being a company director.