How to spend 100k contractor income

[malvolio]

So why did you miss it out then?

Did I?

[contractor79]

£100k? I hate you.

might be more, might be less.... 100 is a nice number to discuss to determine percentages

[THEPUMA]

Doesn't mean my answer is right, or even intended to be right, does it?

This seems to be a recurring theme with you, Mal, when you get something wrong. It reminds me of a small child, who falls over and then says "I meant to do that"!

[malvolio]

This seems to be a recurring theme with you, Mal, when you get something wrong. It reminds me of a small child, who falls over and then says "I meant to do that"!

Or perhaps I'm just a bit too subtle?

Consider - the OP's question contained what looked like some mis-apprehensions of how the numbers actually worked. If they read the thread now, which seems unlikely on past experience but you never know your luck, they will have a much better understanding. If nothing else, they will have seen that asking ambiguous questions results in ambiguous responses.

We've had this debate before. There are two ways to educate people - give them the answers or make them think about how to work out the answers. Which do you think I prefer? And which is more valuable, given the basic problem of how to succeed at being a freelance? You do advice and guidance for a living, I try to make people think - big difference.

[VectraMan]

We've had this debate before. There are two ways to educate people - give them the answers or make them think about how to work out the answers. Which do you think I prefer? And which is more valuable, given the basic problem of how to succeed at being a freelance? You do advice and guidance for a living, I try to make people think - big difference.

Judging by this thread you prefer to give wrong answers.

[THEPUMA]

Or perhaps I'm just a bit too subtle?

No I really don't think that's the case.

It's really the combination of you keep getting it wrong whilst being really aggressive and sarcastic that annoys me.

Wanna try again?

Come on, these are basics: let's at least understand the process before you start worrying about how to spend it

And then saying that you meant to get it wrong in the first place is just laughable.

Now presumably you'll say that this is all a cyber-persona and you're a really nice bloke in real life.

[dude69]

£100k? I hate you.

I know: I always spit on the lower paid.

[rawly]

Why would you pay yourself 18k in Salary? Isn't that wasted extra Tax on the 8k above the recommended 10k?

I assume the 100k is NET? So you will also make money on the VAT Flat Rate income (assuming you are enrolled). Approximately 17.5k, but you'll only Pay Back 11k. So another 6.5k to add to your NET profit.

[ASB]

Why would you pay yourself 18k in Salary? Isn't that wasted extra Tax on the 8k above the recommended 10k?

I assume the 100k is NET? So you will also make money on the VAT Flat Rate income (assuming you are enrolled). Approximately 17.5k, but you'll only Pay Back 11k. So another 6.5k to add to your NET profit.

Currently anything over the tax free threshold is wasteful in terms of tax. Ignores the number of arguments about paying being worthfile for all sorts of spurious reasons.

The FRS is such as you pay your percentage on the gross billings. Thus in your example the caluclation would be:-

100k + 17.5k vat = 117.5, pay 11% (including first year discount of 1%) = 12925. Giving "profit" of 4575. This is subject to CT since it is just other income.

Most people on here would be on the 13% band, this would still yields a useful 1.8% post tax profit - less any input vat lost of course.

[rawly]

Currently anything over the tax free threshold is wasteful in terms of tax. Ignores the number of arguments about paying being worthfile for all sorts of spurious reasons.

The FRS is such as you pay your percentage on the gross billings. Thus in your example the caluclation would be:-

100k + 17.5k vat = 117.5, pay 11% (including first year discount of 1%) = 12925. Giving "profit" of 4575. This is subject to CT since it is just other income.

Most people on here would be on the 13% band, this would still yields a useful 1.8% post tax profit - less any input vat lost of course.

Yes, that's what I meant to say....

13% - Good job Telecommunications is rated lower - we obviously deserve the added incentive.........