Insider ir35 - is uk a tax hell now?

**eek** · 5 August 2021, 10:54

Originally posted by shabak View Post

I was wondering with my new contract, in case of getting 700 pounds, using umbrella calculator I have discovered that I will keep approx 45% of my salary with daily rate of 700.... Does it mean that UK is a tax hell now?

You need to find another calculator.

As unless you are repaying a student loan (which will be rapidly being paid off if you are earning that sort of figure) you should be getting 55% or so.

Or more if you put a lot into a SIPP pension scheme via salary sacrifice.

**ladymuck** · 5 August 2021, 11:47

You mean it's a tax hell for people to pay the tax they should have been paying on their earnings because they always were inside IR35 but had the luxury of a loop hole that meant they could avoid it?

**northernladuk** · 5 August 2021, 12:10

Originally posted by shabak View Post

I was wondering with my new contract, in case of getting 700 pounds, using umbrella calculator I have discovered that I will keep approx 45% of my salary with daily rate of 700.... Does it mean that UK is a tax hell now?

Yep. And remember no expenses as well so a tax hell with no benefits as well.

**eek** · 5 August 2021, 12:14

Originally posted by northernladuk View Post

Yep. And remember no expenses as well so a tax hell with no benefits as well.

Where are you getting 45% take home from when working via an umbrella? Except for student loan repayments and max pension contributions I've never seen that (and I have a lot of data to play with)..

**malvolio** · 5 August 2021, 12:25

The OP is on around £75k a year tax paid, hardly penury. But yes, it ought to be closer to £100k

Then again, if you take £750 a day the old fashioned way it would be very roughly £140k a year after tax, so yes there is a big drop. But perhaps a sense of reality ought to prevail. If you want the bigger numbers, get yourself outside IR35.

**shabak** · 5 August 2021, 13:04

Hmm, I used calculator on this page: https://www.paystream.co.uk/calculat...or-calculator/

And what do you think from experience? Are they accurate?

**eek** · 5 August 2021, 13:14

Originally posted by shabak View Post

Hmm, I used calculator on this page: https://www.paystream.co.uk/calculat...or-calculator/

And what do you think from experience? Are they accurate?

£702 a day (can't get more accurate on that system) gives me £8455 a month - so where are you getting that 45% figure from as that to me is the 55-60% I would expect.

**malvolio** · 5 August 2021, 13:17

Originally posted by shabak View Post

Hmm, I used calculator on this page: https://www.paystream.co.uk/calculat...or-calculator/

And what do you think from experience? Are they accurate?

Who knows. What is your tax code? What other incomes do you have? What is your carried over tax from last year? Are HMRC's records for the last few years accurate? Do you have genuine pensions savings in progress? Are you eligible for Child Support or similar? How many days a year do you work (the calculators will assume far more than reality)?

Why don't you ask your umbrella to explain and perhaps justify the numbers. After all, that's what you're paying them for.

**shabak** · 5 August 2021, 13:20

Originally posted by eek View Post

£702 a day (can't get more accurate on that system) gives me £8455 a month - so where are you getting that 45% figure from as that to me is the 55-60% I would expect.

I used previously this one:
https://www.contractorcalculator.co....sic&Host=LOCAL
And for 700 per day it gives:

Your gross annual revenue is £154,000
Deducting your expenses of � 7,700 results in a profit of � 135,300
Total taxes are �67,512, which is 43% of your company revenue
Your net annual income is � 77,257, and net monthly income is � 6,438
To earn the same via permanent employment would require a salary of £126,895.

Insider ir35 - is uk a tax hell now?