Hi,
I am looking for some advice regarding having my own Ltd versus go with an umbrella when my contract is caught by IR35.
An umbrella like Parasol IT, (i am not considering composites, EBTs etc) would take my gross salary, say 100.000 pounds, deduct employers, employees NI & tax and give me what remains, depending on my expenses, this is around 60%. As an Ltd company owner, if i am inside IR35, i pay a small salary to myself (say 20.000 ) and the rest i take it as dividends (for which i can not avoid paying employees and employers NI ) plus corporation tax 19% (please correct me if i am wrong, not sure actually if i pay both employees and employeers NI for the dividends)
What is my gain by running the Ltd versus using the umbrella then? Is it the fact that for the remaining 80.000 that i will give myself as dividends, the employers NI + employee NI + Corporation Tax is less than the 40% that Parasol IT will deduct from my money when they pay me? Plus of course the elimination of the intermediate, pension plan of my choice and feeling more in control.
Thanks
I am looking for some advice regarding having my own Ltd versus go with an umbrella when my contract is caught by IR35.
An umbrella like Parasol IT, (i am not considering composites, EBTs etc) would take my gross salary, say 100.000 pounds, deduct employers, employees NI & tax and give me what remains, depending on my expenses, this is around 60%. As an Ltd company owner, if i am inside IR35, i pay a small salary to myself (say 20.000 ) and the rest i take it as dividends (for which i can not avoid paying employees and employers NI ) plus corporation tax 19% (please correct me if i am wrong, not sure actually if i pay both employees and employeers NI for the dividends)
What is my gain by running the Ltd versus using the umbrella then? Is it the fact that for the remaining 80.000 that i will give myself as dividends, the employers NI + employee NI + Corporation Tax is less than the 40% that Parasol IT will deduct from my money when they pay me? Plus of course the elimination of the intermediate, pension plan of my choice and feeling more in control.
Thanks
Comment