boring PAYE / Corporation tax question.

[2uk]

Hi I am just considering to start contracting, but so far I am really confused.Please don't get bored with my stupid questions.

When ppl refer to PAYE do they mean employee "Income tax" ( as referred by http://www.hmrc.gov.uk/rates/it.htm )


Starting rate 10%
0 - 2,090
0 - 2,150

Basic rate 22%
2,091 - 32,400
2,151 - 33,300

Higher rate 40%
over 32,400
over 33,300



If you operate via own Limited company, does it mean that you will be taxed according to this scheme ( referred as a Corporation Tax by http://www.hmrc.gov.uk/rates/corp.htm )
Also, in addition to this corp tax , do you pay other tax such as dividend tax ?

Rate 2005-06 2006-07
Starting rate: 0% £0 – £10,000 N/A*
Marginal relief £10,001 – £50,000 N/A*
Small companies’ rate: 19% £50,001–£300,000 £0 - £300,000
Marginal relief £300,001–£1,500,000 £300,001–£1,500,000
Main rate: 30% £1,500,001 or more £1,500,001 or more
Non-corporate distribution rate 19% N/A*


Thanks

[XLMonkey]

PAYE = taxes that yourco deduct from your wages before giving you the remainder. These are
- Income Tax
- Employer's National Insurance
- Employee's National Insurance

Yourco will pay corporation tax on its profits
You will pay dividend tax on money when you pay it from yourco to yourself.

By the way, these are damn fool questions that suggest you haven't done even basic research before expecting the posters on this forum to do your thinking for you.

Go to the PCG website and read their guides first. Then come back with less damn fool questions.

[2uk]

thanks

Thanks for the warm welcome , i guess my questions are foolish to you since you were born knowing all this. Also I haven't found a forum rule that forbids questions about starting up a business.

Well , pointing me to PCG is useful though ...

[malvolio]

Thanks for the warm welcome , i guess my questions are foolish to you since you were born knowing all this. Also I haven't found a forum rule that forbids questions about starting up a business

Still a dumb question though. Should have Googled it first...

But look at it from our side. You're asking for free advice from people who had to find out for themselves and who are used to costing their time and who might be a little short with other people who can't even track down basic answers for themselves.

Read the guides then ask intelligent questions - and there will be plenty - and you will get a different response.

[expat]

Read the guides then ask intelligent questions - and there will be plenty - and you will get a different response.

I might add that the guides that (for example) people here have assembled in order to answer such questions and avoid the need to answer them again and again for each new arrival (for you are not the first) have had much more time and care devoted to them than ad hoc and slightly irritated replies.

The guides also contain the answers to questions that you didn't know you needed to ask.

So it is very much in your own interest to read them first. If you think that it is easier just to fire off a few questions and let others reply with the information, you are mistaken: the information you need is a little bit longer than you will get in a brief discussion like this.

[2uk]

i guess there is no need to argue anymore cos its just a different language we are speaking. Having years of expeience in somehting can make you take some thing for granted and natural and wonder how might one not know this.
Others however might have already done reserach and came up with this question that u find stupid.

In the end why don't you just ignore ones question if you find it stupid ?

I donwloaded the PCG gudie and am gonna tear my @@@ of rading it , if that would make you feel better

[malvolio]

You're not listening. Going back to your original question (which is answered in the guides), you personally are taxed under PAYE as an employee of your company, even if you are a director and sole owner rather than employee, while the company is taxed under corporation tax. You and YourCo are two different legal entities, each with their own revenue stream. Don't mix them up.

But then you've presumably been working for the last n years? Where do you suppose your pay came from? What do you thing the word "self" means in "self-employed"? These really are the absolute basics of what you hope to do in future to earn money.

Lose the attitude, it won't help you in your new career.

[2uk]

You're not listening. Going back to your original question (which is answered in the guides), you personally are taxed under PAYE as an employee of your company, even if you are a director and sole owner rather than employee, while the company is taxed under corporation tax. You and YourCo are two different legal entities, each with their own revenue stream. Don't mix them up.

But then you've presumably been working for the last n years? Where do you suppose your pay came from? What do you thing the word "self" means in "self-employed"? These really are the absolute basics of what you hope to do in future to earn money.

Lose the attitude, it won't help you in your new career.

I am not listening ? I shut up after the first reply havent' I ?

If you are asking where have I been in the last n years, I haven't been in the UK, so I am not dumb.

Attitude ? Just holding on what I believe is true. I don't mean to offend anyone.