does the new Capital Gain Tax affect contractors?

[dkldn]

Hi,

Does the new Capital Gain Tax affect IT contractors? How much can I expect to get after tax for a daily rate 500 or 600?

Thanks,
Derek

[Clare@InTouch]

CGT is a tax on gains - this will apply where someone sells an asset. For example, when a shareholder sells shares in a limited company.

How much tax your company and you pay on a daily rate will depend on how mcuh you take out of the company in salary & dividends, the mix of each, and the expenses you have.

I'd suggest having a chat with an accountant so you can get a basic understanding of the fundamentals.

[Olly]

Please can you let me know how you've landed a role on what's deemed a pretty excellent day rate without being able to do a bit of research about the very very basics of being a freelancer?

[SueEllen]

Please can you let me know how you've landed a role on what's deemed a pretty excellent day rate without being able to do a bit of research about the very very basics of being a freelancer?

Accidents do happen.

[Nixon Williams]

Hi,

Does the new Capital Gain Tax affect IT contractors? How much can I expect to get after tax for a daily rate 500 or 600?

Thanks,
Derek

Capital Gains Tax has been with us for quite a few years, if you mean the "new" rules mentioned in the media, no-one yet knows what they will be. The new rules are expected to be announced in the Budget on 22nd June.

In any event capital gains will only be a factor when the you decide to stop contracting and close your company.

[ChimpMaster]

Capital Gains Tax has been with us for quite a few years, if you mean the "new" rules mentioned in the media, no-one yet knows what they will be. The new rules are expected to be announced in the Budget on 22nd June.

In any event capital gains will only be a factor when the you decide to stop contracting and close your company.

Exactly what I'm waiting to hear about. I'll be vexed if they don't allow some kind of relief (Taper/Entrepreneur) or allowance for Indexation. Vile scum these Lib Dems.

[Wanderer]

Does the new Capital Gain Tax affect IT contractors? How much can I expect to get after tax for a daily rate 500 or 600?

It probably doesn't affect most IT contractors as they generally don't make capital gains unless they are doing an ESC-16 (do a search for that one) but that probably doesn't matter at this stage.

You should have look at calculators and run the numbers there. There are a couple of major issues to consider:

Umbrella is less paperwork but you will pay more tax than a LTD company. There is a sticky on this forum debating the two options at great length.
Inside or outside IR35 can make a big difference, do a search for IR35 on this forum to get the background and then get specialist advice.
If you have a spouse who doesn't work then you can split the dividend income (LTD Co, outside IR35) to pay less tax


Good luck!