Hi All,
I would just like to confirm that i have got the correct grasp of the general cash flow of running a LTD company as a contractor. I have an example below which is completly made up. Have a worked it out correctly?
Thanks
contract rate £20 ph
contract for 40hrs a week for 50 weeks a year
total money into the business account is £40,000
Pay myself a salary of £891.04 (£10692 for year) and pay NI and Tax of £161.12 every month (£1933.44 for year)
accountant for the year is £600
and bank and insurance for year is £108
I take expenses of £800 per month (£9600 a year)
So out of the £40,000 I’m drawing £20,292 as a total salary and expenditure
HMRC take £1933.44 for Tax and NI
Insurance and bank and accountant £708
total out of the account is £22,933.44
left over in the business account is £17066.56
Of which I pay corporation tax on at 20%? Which is £3413.31
so I can draw out as dividends a maximum of £13653.25?
So my net gain from salary/expenses/ dividends is £33,945.25 into my personal bank account
I would just like to confirm that i have got the correct grasp of the general cash flow of running a LTD company as a contractor. I have an example below which is completly made up. Have a worked it out correctly?
Thanks
contract rate £20 ph
contract for 40hrs a week for 50 weeks a year
total money into the business account is £40,000
Pay myself a salary of £891.04 (£10692 for year) and pay NI and Tax of £161.12 every month (£1933.44 for year)
accountant for the year is £600
and bank and insurance for year is £108
I take expenses of £800 per month (£9600 a year)
So out of the £40,000 I’m drawing £20,292 as a total salary and expenditure
HMRC take £1933.44 for Tax and NI
Insurance and bank and accountant £708
total out of the account is £22,933.44
left over in the business account is £17066.56
Of which I pay corporation tax on at 20%? Which is £3413.31
so I can draw out as dividends a maximum of £13653.25?
So my net gain from salary/expenses/ dividends is £33,945.25 into my personal bank account
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