Ir35 calculator to know when its not worth it to work

[northernladuk]

Again wrong - but I won't point out where because it's utterly worthless.

All these threads where a contractor tries and explains the entire tax world in a single table always are. Post numbers, a bit of back and forth, thread descends in to chaos and we've left with a pile of rubbish to confuse whatever poor sod stumbles upon it later.

[cwah]

Really? You don't need anything to decide to do that.

Employer NI alone is worth more than 10% and that's before you factor in expenses.

The difficult decision is when the difference in rates isn't 10% but when inside IR35 pays 25% (or more) extra.

I do because I'm comparing against the net earning from an outside IR35 contract. As outside I have a 25% tax rate, and inside about 42%. So I need a 30% raise to compensate, not 10% as told earlier by the recruitment agency. Help making the right decision!

[eek]

I do because I'm comparing against the net earning from an outside IR35 contract. As outside I have a 25% tax rate, and inside about 42%. So I need a 30% raise to compensate, not 10% as told earlier by the recruitment agency. Help making the right decision!

How do you get to 25%?

[Lance]

I do because I'm comparing against the net earning from an outside IR35 contract. As outside I have a 25% tax rate, and inside about 42%. So I need a 30% raise to compensate, not 10% as told earlier by the recruitment agency. Help making the right decision!

negotiating based on your personal tax position isn't going to change anything.
Nobody cares... It's all about how much you want, and how much they are willing to pay. The rest is just noise and the agent will see it for what it is.

[eek]

negotiating based on your personal tax position isn't going to change anything.
Nobody cares... It's all about how much you want, and how much they are willing to pay. The rest is just noise and the agent will see it for what it is.

Not 100% true - you would be mad to take an inside IR35 contract that would require a lot of travel or overnight stays.

But if everything else is equal - think of the pension contributions.

[cwah]

How do you get to 25%?

19% corporation tax + 7.5% dividend tax. I know there are other variable like expenses (eg. income is an expense) but it's a good ballpark.

[eek]

19% corporation tax + 7.5% dividend tax. I know there are other variable like expenses (eg. income is an expense) but it's a good ballpark.

19%+7.5%=25% Really? - thanks for confirming exactly how bad your maths is.

[cwah]

19%+7.5%=25% Really? - thanks for confirming exactly how bad your maths is.

100% gross income * 81% corporation tax * 92.5% dividend = 74.925% retained.

I grossed to 25% but I could have said 25.075% tax rate if I wanted to be pedantic..

[eek]

I do because I'm comparing against the net earning from an outside IR35 contract. As outside I have a 25% tax rate, and inside about 42%. So I need a 30% raise to compensate, not 10% as told earlier by the recruitment agency. Help making the right decision!

Yet if I go back to your table the inside IR35 tax rate is listed by you not at 42% but at 32.86%....

We can go round for days here making you look like an idiot - it really isn't difficult.

[cwah]

Yet if I go back to your table the inside IR35 tax rate is listed by you not at 42% but at 32.86%....

We can go round for days here making you look like an idiot - it really isn't difficult.

It just needs a little bit of intelligence. Both figures correct, and there isn't anything contradicting each other:
- 32.86% would be the total tax rate if you were to earn £50,270
- 42% is the basic tax rate, so the tax you pay when you earn between £12,571 and £50,270