How much do you work to the tax brackets when inside IR35?

[northernladuk]

totally fair point. I guess there might be an argument to cull a few days if you just slip over that figure, or if you are happy in a gig you may not move to a new one for an extra £50 a day inside , but extra income is indeed extra income!

Ah yes absolutely. I kind of thought you were looking at it from a side by side comparison with that being the only aspect to consider. Being in one the gigs already makes a massive difference you are right.

Yeah that's right but over £100k your personal allowance (12570) tapers off and hits zero at 125k so that has an additional tax impact. Then the 45% kicks in over 150k.

As many of us used to (and likely you still do) stay under the 40% tax bracket, losing the personal allowance and hitting the 45% is not a consideration many of us have possibly had to think about before. Be glad you don't know about it

Right gotcha and amen to that last bit.

[NotAllThere]

...
Currently outside IR35 so not an issue for me.

Definitely. As far as I'm concerned every £1 earned at 65% is 35p in my pocket. Enough £1 and it amounts to a worthwhile amount. I'm more interested in absolute values than percentages. I don't buy things with percentages.

[Fraidycat]

Definitely. As far as I'm concerned every £1 earned at 65% is 35p in my pocket.

Its no longer 65%, according to my quick calculation it is now 68.5% with this years double whammy NI hike

At what point would you decide it would no longer be worth it? at 78.5%, 88.5%?

Because if people like yourself are ok with paying 68.5% or more, they will just keep increasing it.

[northernladuk]

Its no longer 65%, according to my quick calculation it is now 68.5% with this years double whammy NI hike

At what point would you decide it would no longer be worth it? at 78.5%, 88.5%?

Because if people like yourself are ok with paying 68.5% or more, they will just keep increasing it.

Working the same hours at the same level so why not? To cap your own income just to avoid a tax bracket is just ridiculous.

[youngguy]

Nobody likes paying 45% tax but my philosophy is that more is more and if I am paying extra tax then maybe people in genuine need won't have to wait as long for an operation or to be homed.

if only it went to those in need eh!

Without trying to drag this into the political arena , I'd rather keep it in my pocket and donate to charity as I feel I have at least a little control over where that goes.

[NotAllThere]

Its no longer 65%, according to my quick calculation it is now 68.5% with this years double whammy NI hike

At what point would you decide it would no longer be worth it? at 78.5%, 88.5%?

Because if people like yourself are ok with paying 68.5% or more, they will just keep increasing it.

If the tax system were such that with, e.g. £100K I've a marginal rate of 68.5% and at £200k it's 88.5%, I'd definitely go for the £200k roles because in absolute terms it's more money in my pocket. I look at my overall tax rate - not my marginal rate.

[eek]

If the tax system were such that with, e.g. £100K I've a marginal rate of 68.5% and at £200k it's 88.5%, I'd definitely go for the £200k roles because in absolute terms it's more money in my pocket. I look at my overall tax rate - not my marginal rate.

Then you would very much be an exception rather than the rule. Most people look at their total income and think - how can I maximise what I get in my pocket - and remember a lot of us work on projects that are 6-18 months long so it's important to maximise that revenue as you don't (necessarily) know when the next contract will appear.

[pr1]

If the tax system were such that with, e.g. £100K I've a marginal rate of 68.5% and at £200k it's 88.5%, I'd definitely go for the £200k roles because in absolute terms it's more money in my pocket. I look at my overall tax rate - not my marginal rate.

What if the 200k role took more time and/or effort to perform satisfactorily than the £100k role? Still worth it if you were keeping 11.5p of each additional £1 earned over the 100k? Everyone has a line somewhere

[WTFH]

What if the 200k role took more time and/or effort to perform satisfactorily than the £100k role? Still worth it if you were keeping 11.5p of each additional £1 earned over the 100k? Everyone has a line somewhere

There's plenty of "What if's" on the slippery slope.

If two identical roles appear, one paying £100k for a year, the other paying £200k, some on here seem to advocate taking the £100k role because the % after tax is higher and less tax is paid. Others say take the £200k role because the net after tax is higher.

[TheDude]

There's plenty of "What if's" on the slippery slope.

If two identical roles appear, one paying £100k for a year, the other paying £200k, some on here seem to advocate taking the £100k role because the % after tax is higher and less tax is paid. Others say take the £200k role because the net after tax is higher.

I'd take the £200k role and then start looking for a £250k role.