Insider ir35 - is uk a tax hell now?

[jayn200]

But this thread is about inside IR35 people who cant push tax through a corporation. We all know it doesn't apply for outside IR35.

Marginal tax rates become more noticeable when you do extra paid over time. Your main hours you can frame your tax as an average tax rate.

If you are earning at or above £150K as a contractor and client co offers you some overtime, the overtime will be taxed at 55%. You get to take home 45%, is it worth it?

Same for a perm guy earning just below 50K who gets child benefit for 3 kids. Is it worth doing extra overtime when they will get 'taxed' at 65% for salary between 50K and 60K. I wouldn't do any overtime for just 35% take home.

There is another marginal tax rate of 60%, for salary between 100K and 120K. This one will hit inside contractors who earn more normal rates. Is it worth doing any overtime if you deemed salary is 100K?

Yes but my particular response was directed at the higher tax rate in those other countries... I don't know the tax rules in all those countries but I know it well in one of them at least and waaaaay less people in that country are paying those top marginal rates compared to whats happening in UK with ir35 so it's not fair to compare them.

[northernladuk]

I just realised i forget to include NICs.

So its 14% employers NICs, 2% employee NICs and 60% income tax for inside IR35 salary between 100K and 120K.

Marginal 67.5% tax rate 32.5% take home.

Personally if I was coming towards the end of the tax year and i was close to entering that tax band (after putting 40K into my pension). I would just take the rest of the tax year off.

But i can see why some people would carry on as normal, 32.5% take home is still better than nothing!

You know you are starting to sound like a bit of an arrogant a hole? Taking time off because you can't be bothered to earn it. Why not get off your lofty height and just give advice to normal people that have to work all year rather than tell us what you'd do because you can?

And even someone as up their own arse as you doesn't turn money down so I doubt you would anyway.

[eek]

You know you are starting to sound like a bit of an arrogant a hole? Taking time off because you can't be bothered to earn it. Why not get off your lofty height and just give advice to normal people that have to work all year rather than tell us what you'd do because you can?

And even someone as up their own arse as you doesn't turn money down so I doubt you would anyway.

Well if you need to work all year and also earn £100,000+ a year cut your outgoings to sander levels.

But beyond that if you are caught by ir35 what advice can anyone actually give regarding tax beyond:-

1) pick a trustworthy umbrella
2) maximise your pension contributions

[Fraidycat]

So with todays NI increases it looks like a 2.5% increase for those caught by IR35?

1.25% employees NI and 1.25% employers NICs

As if inside IR35 contractors weren't taxed enough tax already.

We used to estimate around 55 or 54% take home, now its getting even closer to 50%.

I guess it now makes calculating take home pay easy, £800 a day inside IR35 expect to take home around £400 a day

Any more increases and inside IR35 contractors really are in tax hell: where effective overall tax rate >50%. (The marginal tax rate already is >50%).