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Permanent Job and Outside IR35 Contract (Part Time)

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    #21
    Originally posted by Pete30 View Post

    I'm safe with the employment contract, but I'm not sure what's IP Ownership - not getting much out of google.
    Intellectual Property. If you invent something as an employee - and "invent" has a fairly wide meaning, from widgets to processes - then the rights to it might well belong to your employer. Therefore if you devise a new, profitable something for your side gig, your current employer may look for a cut of your income from it, or charge the other side a fee or even say to the other side "It's ours and you can't use it".

    A bit of research and some careful reading of your existing contract of employment (including all the various things that HR send out, like Computer Usage policy and the rest) is something of a necessity.
    Blog? What blog...?

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      #22
      Originally posted by malvolio View Post

      Intellectual Property. If you invent something as an employee - and "invent" has a fairly wide meaning, from widgets to processes - then the rights to it might well belong to your employer. Therefore if you devise a new, profitable something for your side gig, your current employer may look for a cut of your income from it, or charge the other side a fee or even say to the other side "It's ours and you can't use it".

      A bit of research and some careful reading of your existing contract of employment (including all the various things that HR send out, like Computer Usage policy and the rest) is something of a necessity.
      Thank you for the explanation. I'm good in this regard, I wont be inventing anything

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        #23
        Originally posted by Pete30 View Post
        That's bad news actually.

        For example. I earn £65K in perm job - so I'm on higher rate. I scoop £10K as dividend from the limited company.
        1. I'll first be paying dividend tax for £8K dividend (after £2K allowance)
        2. And I will also be paying higher tax rate for the dividend as It's now £65K perm + £8 Dividend = £73K taxable salary in total.
        So Ideally I would be paying two tax components for £8K (after £2K allowance). Ouch!!!!
        No, sorry, I didn't explain that properly. You'll only pay 1 lot of tax on that £8k (i.e. dividend tax). However, the % for dividend tax varies, depending on which bracket you're in.

        In this example, you're in the higher rate tax bracket. So, you'd pay 40% tax on some of your salary (c. £27k). You'd also pay 33.75% tax on some of your dividends (£8k).

        The key point here is that you don't pay 8.75% (basic rate) on the first £38k of dividends, because you've already used up your basic rate band on your salary.

        Similarly, if you had £65k of salary + £90k of dividends (£155k in total), you'd be paying 39.35% on the final £3k of dividends (additional rate), even though the salary and dividends are both below the £150k threshold on their own.
        NB The final £3k rather than the final £5k, because the first £2k are covered by the dividend allowance.
        Last edited by hobnob; 4 April 2022, 15:56. Reason: Corrected final paragraph

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          #24
          Originally posted by hobnob View Post

          No, sorry, I didn't explain that properly. You'll only pay 1 lot of tax on that £8k (i.e. dividend tax). However, the % for dividend tax varies, depending on which bracket you're in.

          In this example, you're in the higher rate tax bracket. So, you'd pay 40% tax on some of your salary (c. £27k). You'd also pay 33.75% tax on some of your dividends (£8k).

          The key point here is that you don't pay 8.75% (basic rate) on the first £38k of dividends, because you've already used up your basic rate band on your salary.

          Similarly, if you had £65k of salary + £90k of dividends (£155k in total), you'd be paying 39.35% on the final £3k of dividends (additional rate), even though the salary and dividends are both below the £150k threshold on their own.
          NB The final £3k rather than the final £5k, because the first £2k are covered by the dividend allowance.
          I'm all clear now. Can't thank you enough for taking your time and effort to explain all my questions.

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            #25
            Originally posted by Pete30 View Post

            I'm safe with the employment contract, but I'm not sure what's IP Ownership - not getting much out of google.
            Intellectual Property ownership/rights e.g. https://www.legawise.com/intellectua...ment-contracts

            Some employers will try and own anything you do during your employment that’s related to their work (depends how narrow that field is), so if you work another contract you may well find that they technically own the IP for the work you’re doing for the other client, which could get very messy. *Disclaimer I’m no lawyer so I’d get anything properly checked out if in doubt.

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              #26
              Set up a limited company, pay corporation tax and take the rests as Directors Employer Pension Contribution.

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