Budget\Calculate monthly for PAYE & Corporation Tax (spreadsheet)

[northernladuk]

It does sound like the spreadsheet from SJD would fit the bill perfectly for this OP. I must admit I did like it for the ease of banging numbers in and seeing what's left etc. Not as clever and accurate as Freeagent but quick and easy..

You can find it here.

Free Contractor Downloads - SJD Accountancy

Have to create an account which is free and without obligation though.

[robz8701]

Yes, it's knowing all the right maths though lol

So my current contract is £275 per day so this is a gross invoice of £5500 for an average 4 week month.

My "usual" business expenses come to a total of £1605.70
- £305.20 Fuel (business mileage)
- £32.50 Insurance
- £18 Home Allowance
- £150 Mobile & Broadband
- £250 Pension
- £815 PAYE
- £35 Cloud Services (IT)

Which leaves a monthly profit of £3894.30.

Corporation Tax on that is 20% right?, £778.86.

Meaning that if I wanted to, I could pay myself a maximum dividend of £3115.44?

And based on £3115.44 this means a yearly dividend income of £37,385.28 right?

And from that I'd need to ensure I have made provisions for 32.5% of this for my personal tax (£12,150.216), 1012.52 a month.

I am not saying the above is correct, I am simply after putting the relevant information into a spreadsheet so that I can budget correctly.

I used to be with SJD Accountancy and they provided a spreadsheet but this was solely for Corporation Tax with all the calculations in the background (which I never had a problem with). The personal tax side was neglected and deemed my responsibility. Never had an issue before but when I was assigned a new accountant I got hammered by HMRC for a balancing payment.

100% understand my naivety but I am hoping my new accountant will do the paperwork as well as help me plan.

In the meantime I wanted to know if I could create something to give me a basic view and allow me to budget month by month which covers the whole financial year. I'd also want the spreadsheet to be able to factor in changes in my day rate and if out of work\on holiday when no invoices received.

[aoxomoxoa]

Yes, it's knowing all the right maths though lol

So my current contract is £275 per day so this is a gross invoice of £5500 for an average 4 week month.

Wrong, it's a net invoice of £5500 per month.

The gross invoice needs to include VAT, so would be £6,600. This is on the assumption your contract doesn't allow Yourco to invoice any business expenses.

[stek]

Wrong, it's a net invoice of £5500 per month.

The gross invoice needs to include VAT, so would be £6,600. This is on the assumption your contract doesn't allow Yourco to invoice any business expenses.

And a month is 4.33 weeks on average, time to adjust your spreadsheet...

[robz8701]

Correct, but for the sake of simplifying things I excluded VAT as I want to clarify corporation and self assessment tax amounts first.

Best resource I have found online is Limited Company Tax Calculator | Employed and Self Employed which I think gives me the figures to make a note of.

The way VAT has been explained to me is that 20% is applied to my gross invoice and I pay back HMRC 14.5% as per the flat rate scheme. So for a yearly contract of £275 a day this works out at VAT coming in at £14300, with £10367.5 meaning £3932.5 profit to my company which I can use towards calculating my dividends.

I appreciate my naivety here but as said I am not an accountant and not looking to be. Just want to work out how I calculate and plan my "take home". Appreciate that isn't a correct term and frowned upon but it's the best way I can describe it.

Appreciate the advice\info given so far

[aoxomoxoa]

On the Flat Rate Scheme you charge VAT as per normal, i.e. 20% of your net invoice amount, but you pay 14.5% on the gross value. That's why it's important to be clear on the distinction between net and gross.

In your example the gross annual income for Yourco would be £85,800, resulting in a FRS VAT payment by Yourco of £12,441.

So the FRS profit is rather less than you've calculated, and strictly speaking is further reduced by the amount of input VAT you pay on purchases which you're not able to reclaim.

HTH

[Platypus]

I think for simplicity you can assume that VAT has no effect, and just leave it out of your calculations.

[TheFaQQer]

- £150 Mobile & Broadband

WTF???

What the hell kind of phone / broadband speed do you get for £150 of business expenditure every month???

[TheFaQQer]

So for a yearly contract of £275 a day this works out at VAT coming in at £14300

I doubt that you're going to work 260 days a year.

[stek]

I doubt that you're going to work 260 days a year.

WHS.

Not with brainless thinking as has been shown so far. Better budget for 4 days pa....