London perm salaries

[TheGreenBastard]

But all of this is completely off topic = I d love to hear how others with passive income have reduced legally their perm salary tax liability without the use of a wife (which I dont have) or pension (which I am nervous to do )

I run side projects and BTL through their own Ltds, pretty basic stuff.

[eek]

Thank you Eek - I guess my final question is what tax optimisations are there for perm salaries. Is it really only pension salary sacrifice and is that what most people do - There is no way I am working to hand over 55% of 100K to the government

I d be better off learning plumbing or doing something which is through the LTD then work for that kind of salary and pay that kind of tax

Don't worry about it - after the next budget even salary sacrifice to a pension won't work for you - that's likely to be cut to an allowance of 20%...

[NotAllThere]

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

And there is the solution. Get a lower paid job and have a lower tax rate!

Or sell your property portfolio, and live off the capital.

[LondonPM1]

And there is the solution. Get a lower paid job and have a lower tax rate!

Or sell your property portfolio, and live off the capital.

I was more thinking of not working in the Uk again as perm. That I think is the ultimate conclusion from this discussion.

And woe be tied anyone who tells me 120k is better than 650 outside

[SueEllen]

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.

I don't.

[malvolio]

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

Not confused at all, it's you that doesn't understand the actuality. Doing what you suggest will be picked up by HMRC and you will either get done for evasion or have to pay the taxes as though it were your income. And either way the money doesn't come back to you.

I understand what you're trying to achieve, but this way simply doesn't work, no matter how pure your intentions.

And, just to be even more picky, small companies no longer need a CoSec, and there should only be one anyway.

[jayn200]

I was more thinking of not working in the Uk again as perm. That I think is the ultimate conclusion from this discussion.

And woe be tied anyone who tells me 120k is better than 650 outside

It's not better straight up, just depends how you price the risk of contract work.

Years ago you could say what risk? I've been working 250 days a year for years..... But can't exactly say that anymore can you?

[mattster]

This means my monthly take home from the 100K dream job is 3,895....

I don't get it - what's the problem? You get an extra £3.8k a month on top of whatever your rent-seeking gains you. If you didn't have extra income, you'd be getting £5.5k a month from the £100k job. I hate to break it to you, but most people who live and work in London do so on far less, and frankly many of them work far harder than we do. This is the new reality that we might all have to get used to if the gravy days are truly behind us. £50k a year still considered a decent salary by many and no, you won't be living in a 5 bedder in Balham.

[LondonPM1]

It's not better straight up, just depends how you price the risk of contract work.

Years ago you could say what risk? I've been working 250 days a year for years..... But can't exactly say that anymore can you?

Thanks on reflection my statement that from a 100K salary my take home of 3.9k is rather generous because:

1) I have to take £10 a day for underground from zone 3
2) I have to buy Pret lunch and two coffees costing £10

So that means I have daily expenses of £20 or £400 a month - My 3.9K salary is in fact 3.5K now

You are completely right that the days of of 650 a day for many years with one employer are likely over - But when you realise that you are working under stress and pressure for 3.5K a month (175 a day after tax) it does make it hard to swallow especially when plumbers and electricians are regularly charging that for cash in hand work

I d also add that I would prefer to work for 650 a day for six months a year because at least that way I can do my own thing during the rest of the year if you see what I mean rather than be chained for a full year of work for that equivalent take home

When I was contracting I would never take holidays whilst on contract instead preferring to take it whilst I was on the bench - As it happens i never had any bench for six years straight but i accept these days are different

Its horses for courses - I still remain convinced that the 650 a day is better from an overall work life quality and take home point of view but it can be argued based on a number of parameters abnd variables

[LondonPM1]

I don't get it - what's the problem? You get an extra £3.8k a month on top of whatever your rent-seeking gains you. If you didn't have extra income, you'd be getting £5.5k a month from the £100k job. I hate to break it to you, but most people who live and work in London do so on far less, and frankly many of them work far harder than we do. This is the new reality that we might all have to get used to if the gravy days are truly behind us. £50k a year still considered a decent salary by many and no, you won't be living in a 5 bedder in Balham.

I know and I hear you - I guess getting used to 13K plus VAT hitting your business account each month for many years has completely warped reality and it does make you ponder - I m not going to say that I wouldnt get out of bed for 3.8K but it hardly buys you what many people would think a 100K salary does

Anyway now I have done the maths and I ve checked its correct I can use the data to decide which way to proceed and whether it is worth working as perm