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How was my day rate calculated??

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    How was my day rate calculated??

    So, I'm about to start with with a public sector organisation.
    Private sector I'd charge £525pd, which was agreed.
    For background - I'm VAT registered, pay 16.5% corp tax.

    I know they have to deduct tax & NI 'at source', but the figure they've said they'll pay me is £463.11pd.

    Does anyone have any idea how that's been calculated?!
    And will I be liable for any other taxes after it's paid (income, corporate, etc)?

    #2
    You'd be best to speak to your accountant, who can go through all the figures with you.
    …Maybe we ain’t that young anymore

    Comment


      #3
      Why is VAT and corp tax relevant? Why don't you ask them. They are deducting it so should be able to tell you why.
      'CUK forum personality of 2011 - Winner - Yes really!!!!

      Comment


        #4
        16.5% CT...?? What am I missing?

        .
        Blog? What blog...?

        Comment


          #5
          Originally posted by malvolio View Post
          16.5% CT...?? What am I missing?

          .
          Indeed. Is this another of those schemes?

          Comment


            #6
            Originally posted by Talent Tom View Post
            So, I'm about to start with with a public sector organisation.
            Private sector I'd charge £525pd, which was agreed.
            For background - I'm VAT registered, pay 16.5% corp tax.

            I know they have to deduct tax & NI 'at source', but the figure they've said they'll pay me is £463.11pd.

            Does anyone have any idea how that's been calculated?!
            And will I be liable for any other taxes after it's paid (income, corporate, etc)?
            This figure might be gross to you after employers NI is taken out, I think that runs somewhere round 12%? You would then need to pay employees NI, PAYE and all your other deductions too. If you are about to start a contract shouldn't you have all this locked down first, with a full breakdown from the agent / umbrella etc?

            Comment


              #7
              Plus the charge from the agent for doing the work.....
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Nah, I only included Corp Tax just so you could get an idea of what my take-home would be.
                When I agreed £525 day rate, I don't want to be out of pocket in take-home. I thought it might aid the calculations!

                I have asked the client to clarify (and I've asked the same question of my accountant) but I'm trying to pre-empt any issues. I've never been subject to IR35 before and have no idea how it's calculated.

                It's really baffling me how they arrived at that figure.

                Comment


                  #9
                  Originally posted by Talent Tom View Post
                  Nah, I only included Corp Tax just so you could get an idea of what my take-home would be.
                  When I agreed £525 day rate, I don't want to be out of pocket in take-home. I thought it might aid the calculations!

                  I have asked the client to clarify (and I've asked the same question of my accountant) but I'm trying to pre-empt any issues. I've never been subject to IR35 before and have no idea how it's calculated.
                  It's not that hard to find out. Whatever you charge gets taxed at full rate. Someone somewhere also has to pay Employers' NICs and the apprentice levy. We have no idea who that is from what we've seen from you so far. As a rough guide, you'll get 60% of your gross and no expenses. CT and VAT are irrelevant.

                  It's really baffling me how they arrived at that figure.
                  So is a 16.5% CT rate. What aren't you telling us?

                  EDIT: Ah Hah - just figured it out. The OP is so unaware of how taxation and company law works that he's confusing flat rate VAT with CT... Have to wonder how many other things he's been doing wrong.
                  Last edited by malvolio; 6 August 2017, 10:25.
                  Blog? What blog...?

                  Comment


                    #10
                    Originally posted by malvolio View Post

                    EDIT: Ah Hah - just figured it out. The OP is so unaware of how taxation and company law works that he's confusing flat rate VAT with CT... Have to wonder how many other things he's been doing wrong.
                    Or he made a typo

                    Comment

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