How much would a corporation tax increase affect the bottom line?

[Lance]

Yeah I was looking for a number, every time I see income tax in the news, it tells me how much worse off a person would be earning 80k or whatever.

I am wondering how much worse I'd be off earning 100k revenue.

I work a random number of days each week, usually 3-5, and switch contracts with breaks etc so it's hard to know exactly what my expenses are without delving in, plus calculating the business costs and deducting them etc. etc.

I was just hoping for a ballpark figure, e.g. 100k revenue, average expenses for a year are 10k, so 5% less on the 90k profit, then after dividend tax, take home is 53k vs 50k so 3k difference.

Except with more accurate figures.

GIGO

you've been shown how to do the calculation. So your choices are... give us all the information, do the maths yourself, or get your accountant to do it.

[ladymuck]

Yeah I was looking for a number, every time I see income tax in the news, it tells me how much worse off a person would be earning 80k or whatever.

I am wondering how much worse I'd be off earning 100k revenue.

I work a random number of days each week, usually 3-5, and switch contracts with breaks etc so it's hard to know exactly what my expenses are without delving in, plus calculating the business costs and deducting them etc. etc.

I was just hoping for a ballpark figure, e.g. 100k revenue, average expenses for a year are 10k, so 5% less on the 90k profit, then after dividend tax, take home is 53k vs 50k so 3k difference.

Except with more accurate figures.

That's a bit of a naive expectation. No two businesses have the same business expense profile. It's not the same as applying taxes to employment income due to the fundamental difference in the point in the cycle when taxes are paid.

So, for your £80k a year contractor, how would you expect to know what money he has left to go down the pub with after his bills have been paid?


EMPLOYEE
Get paid -> tax deducted -> expenses incurred

LTD CO
Get paid -> expenses incurred -> tax deducted

I'm surprised but not surprised

[FIERCE TANK BATTLE]

Don't need no fancy pants calculator.

Turnover/Sales/Revenue = A
Less Expenses = B
Net Profit = A - B = C
Corporation Tax @ (whatever rate) = C x CT% = D
Profit after CT = C - D = E

Obviously if there is no profit, there's no CT to pay.

Do the calculation for 19% CT. Do the calculation for 24%. Subtract the two and you have your difference.

I'm assuming you're after a different answer but not asked the question in the right way? Seems way to obvious of an answer

Yeah I was looking for a number, every time I see income tax in the news, it tells me how much worse off a person would be earning 80k or whatever.

I am wondering how much worse I'd be off earning 100k revenue.

I work a random number of days each week, usually 3-5, and switch contracts with breaks etc so it's hard to know exactly what my expenses are without delving in, plus calculating the business costs and deducting them etc. etc.

I was just hoping for a ballpark figure, e.g. 100k revenue, average expenses for a year are 10k, so 5% less on the 90k profit, then after dividend tax, take home is 53k vs 50k so 3k difference.

Except with more accurate figures.

[Craig@Clarity]

I was looking for a calculator that lets you input it but no luck.

Say you pull in 100k revenue. Corp tax is currently 19%. How much do you lose if it goes up to 24% or 26%?

Don't need no fancy pants calculator.

Turnover/Sales/Revenue = A
Less Expenses = B
Net Profit = A - B = C
Corporation Tax @ (whatever rate) = C x CT% = D
Profit after CT = C - D = E

Obviously if there is no profit, there's no CT to pay.

Do the calculation for 19% CT. Do the calculation for 24%. Subtract the two and you have your difference.

I'm assuming you're after a different answer but not asked the question in the right way? Seems way to obvious of an answer

[Amanensia]

Well it seems you think that revenue and profit are the same thing, so...

Well, considering you asked the question only giving revenue and not profit, what do you expect!

[FIERCE TANK BATTLE]

it depends. How much profit on the £100k.

I mean I'm not sure if you're trolling or not.
100000 x .19 = 19,000
100000 x .24 = 24,000
100000 x .26 = 26,000

If you can't work that out you're not going to be able to earn £100k surely?

Well it seems you think that revenue and profit are the same thing, so...

[WordIsBond]

It will have no effect. The party proposing to increase CT is also proposing to increase dividend tax to the same level as income tax.

The result is that you can pay NI+Income tax, or CT+Income (dividend) tax.

The latter means you have to have a company, pay an accountant, and worry about IR35. The former you can do through an umbrella.

You will be better off with the former, so you don't have to worry about CT changes. You're ability to function as a business will have already been destroyed.

[Lance]

I was looking for a calculator that lets you input it but no luck.

Say you pull in 100k revenue. Corp tax is currently 19%. How much do you lose if it goes up to 24% or 26%?

it depends. How much profit on the £100k.

I mean I'm not sure if you're trolling or not.
100000 x .19 = 19,000
100000 x .24 = 24,000
100000 x .26 = 26,000

If you can't work that out you're not going to be able to earn £100k surely?

[Amanensia]

5% or 7% of your profits, respectively.

However I’ve not seen any indication that CT will rise to those levels for small companies. More likely is 21% under Labour, and no change under the Tories.

I’d be far more worried about Labour’s plan to tax dividends at your full income tax rate, ignoring the fact that CT has already been paid.

[TestMangler]

I was looking for a calculator that lets you input it but no luck.

Say you pull in 100k revenue. Corp tax is currently 19%. How much do you lose if it goes up to 24% or 26%?

You won't be paying any corp tax because in 2 years time, under the Tories, pretty much every contractor in the country will be inside IR35 and paying 'their fair share' via employment taxation.

[FIERCE TANK BATTLE]

I was looking for a calculator that lets you input it but no luck.

Say you pull in 100k revenue. Corp tax is currently 19%. How much do you lose if it goes up to 24% or 26%?