Originally posted by BlasterBates
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If you're a contractor and pay yourself a salary then you'll get taxed 65.8%
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You should only worry about being investigated if you have something to hide!
If you ask for, receive and follow good professional advice then any HMRC enquiry should be fine, with nothing to worry about.Comment
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Originally posted by Nixon Williams View PostYou should only worry about being investigated if you have something to hide!
If you ask for, receive and follow good professional advice then any HMRC enquiry should be fine, with nothing to worry about.Comment
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Originally posted by Clare@InTouch View PostI would imagine that only those caught by IR35 would pay themselves such a high salary anyway
Now I have no idea if that is true or not and whether or not that knocks you off their target list. However, I am pretty sure it reduces risk, which is good enough for me.Comment
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Originally posted by GB9 View Post...what they expect is someone to take a salary appropriate to the role they are fulfilling..."See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."Comment
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Originally posted by ContractorAccountant View PostSlightly over-dramatic but in 13/14 if you pay yourself a salary through your own Ltd company then the income between £32,010 and £41,450 will be hit by 65.8% "tax": 40% income tax + 12% Employee NI + 13.8% Employer NI.
The 40% tax band starts at £32,010 of taxable income, in other words, given the personal allowance of £9,440 it starts at £32,010 + £9,440 = £41,450 of income.
12% employee NI on earnings above £7,755 up to £41,450, after which it drops to 2%. So you do not pay 12% employee NI and 40% tax on any chunk of income.Last edited by IR35 Avoider; 31 May 2013, 22:23.Comment
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Originally posted by GB9 View PostSpeaking with HMRC I have been told that what they expect is someone to take a salary appropriate to the role they are fulfilling, with dividends being taken out of what remains i.e. company profit.
Now I have no idea if that is true or not and whether or not that knocks you off their target list. However, I am pretty sure it reduces risk, which is good enough for me.
I don´t quite follow the logic that an HMRC officials treat all the contractors the same. It´s obvious they´ll focus on the ones avoiding the most, because that´s where they have the most to gain, given they can´t investigate everyone.I'm alright JackComment
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