How was my day rate calculated??
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    Default 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)?

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    You'd be best to speak to your accountant, who can go through all the figures with you.
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    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.
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    16.5% CT...?? What am I missing?

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    Quote Originally Posted by malvolio View Post
    16.5% CT...?? What am I missing?

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    Indeed. Is this another of those schemes?
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    Quote 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?

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    Plus the charge from the agent for doing the work.....
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    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.

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    Quote 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; 6th August 2017 at 10:25.
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    Quote 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

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