Take home pay %

[proggy]

As has been proven many times in life and indeed on here, circumstances change. We have a number of members that have been bitten setting up in a stable relationship and then coming asking for help when it has gone wrong. It is a valid and real risk. Up to people whether they can stomach a discussion about planning for the worst or not. Pretending it never happens is a bit stupid IMO.

If it goes pear shaped you just change the dividend split or close the company, quite easy to solve.

[northernladuk]

If it goes pear shaped you just change the dividend split or close the company, quite easy to solve.

Really, when these things need the signature of both directors/shareholders? When one director has emptied the bank and buggered off? and so on and so on. I don't think so. Well thought out post that one.

[warrenboon]

Ask the umbrella for a breakdown of deductions, it should be clear where the money's going.

£140 umbrella fee? Really? Maybe my Ltd Co accountancy fees aren't so bad after all...

As for splitting with a spouse, I can't see the downside. I imagine it's a matter of winding up the Ltd Co, splitting the proceeds, and starting a new one...

[proggy]

Really, when these things need the signature of both directors/shareholders? When one director has emptied the bank and buggered off? and so on and so on. I don't think so. Well thought out post that one.

You don't need it to start another company and then invoice through that. Simple. Don't think your cut out....

[LisaContractorUmbrella]

Hello,
I started contracting a few months ago and have to say i'm a bit disappointed as my take home pay is about 55% of my invoiced value, I was always under the impression that it would be more.

For example (this is for 1 month):
Invoiced amount £10,000
Umbrella fee £140
Expenses £ 700

Take home pay approx £5,500.

I have started looking into the limited company set up.
Based on an invoiced amount of £10,000 I have worked out that take home pay will be about £6,700 per month.

Is this about right or is something going wrong somewhere?

Our calculator works out the take home as follows:

Income 10,000.00
Expenses 700.00



Employer's NI 1,037.91
Employee's NI 431.30
Employee Tax 2,420.13
Total All Tax 3,889.34
CU Margin 95.00
Total Net Income 6,019.40

The difference could be because you are not on a standard tax code or it could be that the umbrella company is making deductions other than those listed above.

If you moved to Ltd you would definitely be better off if your working practises put you outside IR35 so you should consider the level of supervision, direction and control that your client will have, whether there is mutuality of obligation within the working relationship and whether or not you would have an unfettered right of substitution.

[stek]

Take home pay %

Our calculator works out the take home as follows:

Income 10,000.00
Expenses 700.00



Employer's NI1,037.91
Employee's NI 431.30
Employee Tax2,420.13
Total All Tax3,889.34
CU Margin 95.00
Total Net Income6,019.40

The difference could be because you are not on a standard tax code or it could be that the umbrella company is making deductions other than those listed above.

If you moved to Ltd you would definitely be better off if your working practises put you outside IR35 so you should consider the level of supervision, direction and control that your client will have, whether there is mutuality of obligation within the working relationship and whether or not you would have an unfettered right of substitution.

Could be the 10k includes vat?

[jamesbrown]

Could be the 10k includes vat?

Since the OP mentions the amount invoiced, that would be my guess too.

[northernladuk]

You don't need it to start another company and then invoice through that. Simple. Don't think your cut out....

And what happens to the profits, CT and VAT in the current one while you are at war with your partner smarty pants?

[proggy]

And what happens to the profits, CT and VAT in the current one while you are at war with your partner smarty pants?

It remains there, if someone takes it out without the others agreement it's called theft.

[LisaContractorUmbrella]

Could be the 10k includes vat?

Don't think so - a quick run through the calculator would give a net of £5168 on earnings of £8333.33 so still well adrift from the figure the OP gave