Take home percentage from contract (Umbrella)

[eek]

Thanks all for your replies.

@eek good point about pre-tax deductions and pension, I'd need to revisit my calculations.

@VelcroPower, you're right I missed that. I did withdraw income mostly as dividends, which is yet to be reported.

So I guess if I got this right, I'd still fall in the 20% tax bracket for this year for any income via umbrella between now and April (pending HMRC tax code.)

And I believe then that when I come to declare dividends in personal return later in this year, high rate would apply on those dividends at ~32%

Yep - but you could always change things and repay the director's loan you took out.

[amrhady]

Thanks all for your replies.

@eek good point about pre-tax deductions and pension, I'd need to revisit my calculations.

@VelcroPower, you're right I missed that. I did withdraw income mostly as dividends, which is yet to be reported.

So I guess if I got this right, I'd still fall in the 20% tax bracket for this year for any income via umbrella between now and April (pending HMRC tax code.)

And I believe then that when I come to declare dividends in personal return later in this year, high rate would apply on those dividends at ~32%

[VelcroPower]

Hi, I tried finding an online calculator for this but nothing specific to my question, so here goes.

I work through my LTD and finished my last contract in Dec, I've withdrawn enough from my company this year to make me a high rate tax payer.

Considering a contract via an umbrella from now till April (or possibly beyond.)

Question is, am I correct in assuming that I will be paying roughly (and at least) 52% (40% + 12.5% NI) of the contract value till April in taxes and NI ? So will be left with 48% ?

appreciate if anyone can shed some light on this. many thanks.

How did you withdraw the funds?

If mainly in dividend form then you won't get taxed at 40% through an umbrella because they go off your previous earnings via PAYE and HMRC will not have your current tax year dividend income details yet. You'll have to catch up at the end of the tax year.

[northernladuk]

Try this and if you've any further questions that calculators won't handle give them a call.

Umbrella Take Home Pay Calculator - Clarity Umbrella Ltd

[eek]

Hi, I tried finding an online calculator for this but nothing specific to my question, so here goes.

I work through my LTD and finished my last contract in Dec, I've withdrawn enough from my company this year to make me a high rate tax payer.

Considering a contract via an umbrella from now till April (or possibly beyond.)

Question is, am I correct in assuming that I will be paying roughly (and at least) 52% (40% + 12.5% NI) of the contract value till April in taxes and NI ? So will be left with 48% ?

appreciate if anyone can shed some light on this. many thanks.

Not quite -

The umbrella will deduct Employers NI (13.8%) (and probably also the apprenticeship levy at 0.5%) before working Employee NI and income tax is deducted.

You would be better off finding an umbrella that allows payroll deduction into a pension (contractor umbrella and clarity umbrella both do and both post on here) and throwing as much as you can into your pension pot.

[amrhady]

Hi, I tried finding an online calculator for this but nothing specific to my question, so here goes.

I work through my LTD and finished my last contract in Dec, I've withdrawn enough from my company this year to make me a high rate tax payer.

Considering a contract via an umbrella from now till April (or possibly beyond.)

Question is, am I correct in assuming that I will be paying roughly (and at least) 52% (40% + 12.5% NI) of the contract value till April in taxes and NI ? So will be left with 48% ?

appreciate if anyone can shed some light on this. many thanks.