London perm salaries

[LondonPM1]

The double whammy of Brexit and Covid-19 has managed to do what several foreign militaries, a great fire, the plague and numerous financial recessions couldn't and kill the City of London as an engine of growth in this country.

People need to start getting their heads round this and it's implications for the rest of the country. While it could be argued a long term rebalancing of the economy is overdue it won't be pretty while it happens.

This is very helpful and people do realise this - I think people are still adjusting to what the new world will look like and how incomes will be reduced.

Somehow London always does bounce back - I am hoping johnson will drop dead or resign but thats a different subject

[malvolio]

Just to be pedantic, you can't put your family on the payroll since all that would happen would be you paying all the taxes as your income. You can of course add the wife, but she could only draw a salary in line with the effort she puts in to the company. You are not an MP...

Shares, obviously, are an option - but not for the kids under S660a and if you give them to your parents or anyone else in the family other than the wife you won't be allowed legal access to the money.

But all academic. You won't get £100k in this market anyway.

[BlasterBates]

I would love someone else to show you why a 100K for a mid 30s living in london with two kids does not go far alone after bills etc.

Do you really think these figures make anyone remotely wealthy when a mid terrace house in Balham goes for 1.2 MM?

This thread is going sideways - I wanted to emphasise the marginal tax for those with passive income and I hope I have achieved that - If you can contribute to that discussion with ways to optimise or mitigate this please do- I cannot believe i am the first to think that perm working is just not worth it after tax if you have a passive income

No it won't make someone wealthy who has a wife and two kids and the wife has never worked, but then again London has always been like that.

There are plenty of people who are happy to work for 100K and live in London. Those who have kids and the wife doesn't want to work will probably have to move somewhere else. Not a problem.

People I know who were brought up in London all live somewhere else.

[LondonPM1]

Just to be pedantic, you can't put your family on the payroll since all that would happen would be you paying all the taxes as your income. You can of course add the wife, but she could only draw a salary in line with the effort she puts in to the company. You are not an MP...

Shares, obviously, are an option - but not for the kids under S660a and if you give them to your parents or anyone else in the family other than the wife you won't be allowed legal access to the money.

But all academic. You won't get £100k in this market anyway.

Thanks just for clarity - I mean putting mother and father on payroll as company secretary for 12.5K each and using their personal allowance - Rather than wife or kids.

Sorry if I confused you

[eek]

Thanks just for clarity - I mean putting mother and father on payroll as company secretary for 12.5K each and using their personal allowance - Rather than wife or kids.

Sorry if I confused you

So dodgy tax avoidance?

But you were considering moving the property into a limited company in an earlier post? Do you have mortgages on these properties as there is zero reason to do that otherwise?

[LondonPM1]

So dodgy tax avoidance?

But you were considering moving the property into a limited company in an earlier post? Do you have mortgages on these properties as there is zero reason to do that otherwise?

Yes of course dodgy tax avoidance - What else could it possibly be other than perhaps tax planning maybe....

I dont feel comfortable going into further personal details about the tax circumstances other than to disclose what I have already done which is the income from personally owned BTL - Yes there is some income in the company name and I choose not to draw anything down from there

This post was to highlight how perm salary is reduced by tax if you have passive income and the extent to which that happens

As a side effect when someone tells me that 120K a year is better than 650 per day which is a subject that I have participated in many times over the last few years I can perhaps share my working out to prove them otherwise

Again I would love to know of any way to minimise that perm salary - The only one I can think of is 40K contribution to pension but I do not trust pensions and am a long way from getting to 65

If that is the case I would hope that fellow colleagues can reaffirm that working for 100K results in 3,900 after tax and therefore in my case completely not worth the stress or agro or commuting / lunch costs (when covid finishes)

[fullyautomatix]

I used an online tax calculator and plugged in 175K as earnings over a year, and I got back 8.5K as take home. Not sure how the OP got a 3.5K number.

[fullyautomatix]

100K salary as a perm is possible to achieve but for that you absolutely need to know the senior guys and have them head hunt you. It is almost impossible to apply for a job off job serve or linkedIn and expect to get a 100k plus salary.

[LondonPM1]

I used an online tax calculator and plugged in 175K as earnings over a year, and I got back 8.5K as take home. Not sure how the OP got a 3.5K number.

3.9K is the additional after tax take home pay from agreeing to work for 100K a year. My workings all detailed in the first post.

[eek]

Yes of course dodgy tax avoidance - What else could it possibly be other than perhaps tax planning maybe....

I dont feel comfortable going into further personal details about the tax circumstances other than to disclose what I have already done which is the income from personally owned BTL - Yes there is some income in the company name and I choose not to draw anything down from there

This post was to highlight how perm salary is reduced by tax if you have passive income and the extent to which that happens

As a side effect when someone tells me that 120K a year is better than 650 per day which is a subject that I have participated in many times over the last few years I can perhaps share my working out to prove them otherwise

Again I would love to know of any way to minimise that perm salary - The only one I can think of is 40K contribution to pension but I do not trust pensions and am a long way from getting to 65

If that is the case I would hope that fellow colleagues can reaffirm that working for 100K results in 3,900 after tax and therefore in my case completely not worth the stress or agro or commuting / lunch costs (when covid finishes)

So you do have mortgages on the properties and you haven't filled in your tax returns correctly.

But paying your parents for not doing work would be rather frowned upon were HMRC to come acalling - heck they don't like wives being paid a lot and that's perfectly allowable under S660..