Contract Rate calculator (Take home)

[evilagent]

Dont you just take your gross:

substract the whole tax allowance amount (which will be different if your single, married etc)

Then, for every £1,000 you gross, you subtract Corp-Tax, and put aside.
(eg, if Corp-Tax is 24%, you bank £760 for every £1,000 div you take)


from the gross you can deduct your running costs, etc.
variables:
Complications are if you pay yourself above tax threshold, and pay nominal amounts of PAYE.
Expenses.
An amount for accountants, etc.

[Wanderer]

So basically, do you have any calc to suggest to me?

The take home is dependant on your IR35 status.

Earning £200/day and presuming £25/day accounted for as expenses, you would get ~70% of the contract value if IR35 caught and ~85% if you are outside IR35.

Nixon Williams have one of the better calculators in my opinion. Plug your numbers in and see what you get out.

[SueEllen]

But you get my point anyways...

The reason you were told you work for one is that you need to get it firmly ingrained into your head that your money and the company's money are two different things otherwise you can end up in a mess that even your accountant won't be able to help you with.

And don't be attempted to operate without an accountant.

[Bluenose]

One of the pitfalls with the calculators is they do not subtract capital gains tax which, of course is due if you are limited and take out divi's, most calculators assume that you are and do not subtract the capital gains tax due which comes out of your take home.

So, you can take it home but you will have to give HMRC quite a bit

[Wanderer]

One of the pitfalls with the calculators is they do not subtract capital gains tax which, of course is due if you are limited and take out divi's, most calculators assume that you are and do not subtract the capital gains tax due which comes out of your take home.

Uh, I think you mean corporation tax and you are clearly confused about how this works because the calculators do subtract CT in order to calculate company profits which are then available to distribute as dividends...

[Antman]

Some of regular posters from the accountancy companies would be better placed than I to answer this but I though that CGT applies to the individual when you do a your yearly tax declaration.

A calculator wouldn't be able to tell you this because it depends when you take your money out of the ltd and the limits you have used in that financial year (o summat).

Better still wait from a proper expert to pronounce on this.

[malvolio]

Some of regular posters from the accountancy companies would be better placed than I to answer this but I though that CGT applies to the individual when you do a your yearly tax declaration.

A calculator wouldn't be able to tell you this because it depends when you take your money out of the ltd and the limits you have used in that financial year (o summat).

Better still wait from a proper expert to pronounce on this.

I think that might be wise.

Meanwhile, the guides beckon... Do not resist the call

HTH

[Bluenose]

Uh, I think you mean corporation tax and you are clearly confused about how this works because the calculators do subtract CT in order to calculate company profits which are then available to distribute as dividends...

Yes, apologies, wrong terminology.

Best example of my point though is the SJD calculator.

It gives you the take home amount but a rookie could (would?) assume that that whole figure is there to spend, it is not, HMRC need to take their slice as personal tax on the dividends to get that figure into your personal bank account.

There should be an option (apologies if this has been implemented) of providing the true estimate once personal tax has been removed.