Reply to: How was my day rate calculated??

[Agent]

No matter, I can assure you there was no irony in my response

How ironic.

[pr1]

You didn't get the irony in my post did you..

tough crowd

[MrMarkyMark]

You didn't get the irony in my post did you..

No matter, I can assure you there was no irony in my response

[Agent]

Compared to the staggering value you provide here yourself, you mean

You didn't get the irony in my post did you..

[lucyclarityumbrella]

Make that three worked examples....

maybe it will sink in now

[malvolio]

Make that three worked examples....

[lucyclarityumbrella]

So, I'm about to start with with a public sector organisation.
Private sector I'd charge £525pd, which was agreed.
For background - I'm VAT registered, pay 16.5% corp tax.

I know they have to deduct tax & NI 'at source', but the figure they've said they'll pay me is £463.11pd.

It should be similar to the way that an umbrella calculates it, based on your daily rate our figures are as follows:

Weekly

Company Income 2625.00
Employment Taxes 307.21
Employee's NI 113.77
Employee Tax 791.08
Total All Tax 1,212.06
CU Margin 29.50
Total Net Income 1,383.44

They will be deducting the Employment Taxes (ie Employers NI and Apprenticeship Levy) and they should be taking the Employees NI and PAYE tax, so what is paid to your Ltd company can be taken with all taxes accounted for.

Removing the Employment taxes from your contract rate and excluding our umbrella margin, your day rate which is subject to Employees NI and PAYE tax is around £463.00 (as they suggest).

HTH

[MrMarkyMark]

Get used to these kind of answers Tom, very few helpful people on these forums...

Most just say ask your accountant or google it...my advice is ask your accountant and before you do, give it a quick google.

Good luck buddy

Compared to the staggering value you provide here yourself, you mean

[pr1]

So, I'm about to start with with a public sector organisation.
Private sector I'd charge £525pd, which was agreed.
For background - I'm VAT registered, pay 16.5% corp tax.

I know they have to deduct tax & NI 'at source', but the figure they've said they'll pay me is £463.11pd.

Does anyone have any idea how that's been calculated?!
And will I be liable for any other taxes after it's paid (income, corporate, etc)?

My guess is they're taking out employers NI/apprenticeship levy but expect you to pay the income tax/employees NI out of what's left

£463.11*5*52=£120408.60 "salary"

plug that into Employer NIC Calculator - Good Calculators gives £15489.67 employers NI due

and apprenticeship levy of 0.5% on salary = £602.04

£120408.60 + £15489.67 + £602.04= £136500.31

so it's costing them £135898.27 /52 /5 = £525.00 per day to pay you £463.11

[malvolio]

Get used to these kind of answers Tom, very few helpful people on these forums...

Most just say ask your accountant or google it...my advice is ask your accountant and before you do, give it a quick google.

Good luck buddy

So we've given the best answers we can on the information provided, have supplied a worked example, have not got any answers to the questions we asked in return (and I pointed out that being a contractor involves rather more than simply doing the day job - something I've been saying for at least ten years) and we're not being helpful...

Some people simply can't be helped, sadly.

[BrilloPad]

Get used to these kind of answers Tom, very few helpful people on these forums...

Most just say ask your accountant or google it...my advice is ask your accountant and before you do, give it a quick google.

Good luck buddy

Given a decent question, there is massive amounts of help on here.

What gets people upset is when people have done no reading whatsoever. Or if they answer a question based on given facts. And those given facts then mutate as the thread goes on.

[northernladuk]

Get used to these kind of answers Tom, very few helpful people on these forums...

Most just say ask your accountant or google it...my advice is ask your accountant and before you do, give it a quick google.

Good luck buddy

:rollin

[Agent]

Get used to these kind of answers Tom, very few helpful people on these forums...

Most just say ask your accountant or google it...my advice is ask your accountant and before you do, give it a quick google.

Good luck buddy

[northernladuk]

Thank you!

I don't know about what expenses can be claimed - so I'll do a bit more research.

There is an entire section of the forum dedicated to being inside IR35.

[malvolio]

Thank you!

I don't know about what expenses can be claimed - so I'll do a bit more research.

That's easy. No travel, accommodation or subsistence costs if you are inside IR35. Normal business costs can still be offset against CT of course.