LTD calculator

[Mehmeh]

Hello guys,

Found this limited company calculator on SJD accountants website, is this correct? It's giving me a very high % take home result, much more than other calculators on the net...

http://www.sjdaccountancy.com/contra...tor/index.html

cheers

[LA1]

As it doesnt ask you about expenses, you can assume they are offsetting as much as they can ie travel, hotels, business expenses etc. The chances are that you would never be able to offset half of these.

Many companies put these misleading calculators on their websites. The only way to know is give them a call and make sure thay take into account your actual, receipted expenses only.

[Ardesco]

I don't think expenses are taken into account. Looks more like they are assuming that you will pay yourself a token wage of £5225 and then take the rest of the money out as divi's.

Not knowing what figures you have put in we can't possibly advise you how likely they are to be correct.

Work it out yourself, add up your annual take home. Take £5,225 from it. take 20% off for CT and then pay yourself up to higher tax band in divi's with no more tax to pay. If you then go over the higher rate tax band you have to pay more tax.

If you are on a low rate the % will appear higher. You will be looking at around the 77% - 80% mark for a LTD Co.

[VectraMan]

I'm pretty sure this calculates on the basis of leaving the money in the company, then shutting down and getting the taper relief (or whatever it's going to be called) after three years.

If you put in £10,000 per day, you still get to keep 73%.

[Mehmeh]

Well let me give you some numbers.

350pd

it basically gives 77.68% take home, which fits in with what you said basically.

and if i use contractor umbrellas calculator it gives 59.91% (with no expenses)

is the difference in tax between ltd and umbrella really that vast???

just a bit shocked anyone would umbrella with those kinda charges!

[Fred Bloggs]

I'm pretty sure this calculates on the basis of leaving the money in the company, then shutting down and getting the taper relief (or whatever it's going to be called) after three years.

If you put in £10,000 per day, you still get to keep 73%.

I believe you are right. I always felt pretty uncomfortable with the idea of being a serial business closer downer over the long term. But SJD defend it as far as I know, saying they never had a problem. It's academic now anyway since the changes in CGT taxation. I will have to work out how much I retain per year after taxes but I do not think it is anywhere near to 73%. I pay £10k salary and draw out divis to just under the 40% band. Anything left over goes into a SIPP.

[VectraMan]

is the difference in tax between ltd and umbrella really that vast???

Yes.

Though that assumes you're outside IR35. If you're caught by IR35, there's not much benefit over an umbrella.

Has it ever been confirmed what's going to happen post budget with this scheme? The 10% is for selling up, do we know if it'll apply to shutting down the business too?

[Ardesco]

Well let me give you some numbers.

350pd

it basically gives 77.68% take home, which fits in with what you said basically.

and if i use contractor umbrellas calculator it gives 59.91% (with no expenses)

is the difference in tax between ltd and umbrella really that vast???

just a bit shocked anyone would umbrella with those kinda charges!

With umbrella you are paying Employers and Employees NI and Tax on all of your income, with a LTD Co you can pay yourself your tax free allowance, then pay CT and then take your money out as divi's which saves you a lot of tax.

[LisaContractorUmbrella]

With umbrella you are paying Employers and Employees NI and Tax on all of your income, with a LTD Co you can pay yourself your tax free allowance, then pay CT and then take your money out as divi's which saves you a lot of tax.

But only if you fall outside IR35 - inside and you pay tax, employee's and employer's NI as you do with a brolly

[Ardesco]

But only if you fall outside IR35 - inside and you pay tax, employee's and employer's NI as you do with a brolly

Yup as stated above by Vectraman