Reply to: How on earth do you calculate take home pay when inside IR35?

[WTFH]

no, she and the kids took it all.

You bred?

[JohntheBike]

Did you subsequently income split that with your wife?

no, she and the kids took it all.

[WTFH]

230 x 7.5 is 1725. I worked 0900 to 1700 with 30 mins. for lunch when a permie.

Did you subsequently income split that with your wife?

[JohntheBike]

Consultancy chap I was talking to last week says he uses a benchmark of 230 billable days when working out what to charge his clients. Another handy comparative starting point if hours aren't suitable.

230 x 7.5 is 1725. I worked 0900 to 1700 with 30 mins. for lunch when a permie.

[BR14]

Ffs people

Just take gross pay * by 0.63 / 12 to give you near enough figures


Sent from my iPhone using Contractor UK Forum

i use 0.62, but hey, - THIS !

[GhostofTarbera]

Ffs people

Just take gross pay * by 0.63 / 12 to give you near enough figures


Sent from my iPhone using Contractor UK Forum

[eek]

He said something about taking off weekends, bank holidays, holidays. Never mentioned sick leave or training.

I work out my target rate assuming a 40 working week year, i.e. three months off, which is just 200 days.

Yep, for billing purposes it really doesn't work. For the consultancy bit I'm vaguely working on I'm budgeting 210 days work at £x a day.

It works out that the absolute max salary is around 90 days billable income once Employers NI and other overheads (namely sales staff as they are expensive) are covered.

[ladymuck]

260 working days in a year so 28 days holiday (minimum legally required) and 2 days sick?

I would be using 220 (33 days holiday, 7 for sickness / training) or even better 210 treating anything else as a bonus.

He said something about taking off weekends, bank holidays, holidays. Never mentioned sick leave or training.

I work out my target rate assuming a 40 working week year, i.e. three months off, which is just 200 days.

[eek]

Consultancy chap I was talking to last week says he uses a benchmark of 230 billable days when working out what to charge his clients. Another handy comparative starting point if hours aren't suitable.

260 working days in a year so 28 days holiday (minimum legally required) and 2 days sick?

I would be using 220 (33 days holiday, 7 for sickness / training) or even better 210 treating anything else as a bonus.

[ladymuck]

When I worked on payroll and T&A systems, the basic hours for a year were always assumed to be 1700. This might be a starting point for you.

Consultancy chap I was talking to last week says he uses a benchmark of 230 billable days when working out what to charge his clients. Another handy comparative starting point if hours aren't suitable.

[WTFH]

we're talking about nett pay here. Clearly income splitting has an effect on nett pay.

Yes we are. If you are deemed inside IR35, then there's no income splitting.
One person does the work, the same person gets paid for the work, and pays tax on it like a normal tax payer. No dividends, no income splitting, no laundering money. Just PAYE, like everyone else who has worked at one place for 5+ years.
Now, after you've paid your full income tax and NI on it, if you want to some of it to your wife, feel free to, but there's no tax benefit to doing that.

[JohntheBike]

Has anyone done any fag packet calculations, assuming nothing changes, working the whole year with a few weeks permie style (25 odd days or whatever) holiday, no significant expenses (no significant T&S for example), rate £400 outside = £xxx inside?

I've asked my accountant to help me work out the difference but in the meantime I've been asked to give them a figure for a raise in case I am found inside and I've been wondering about it.

When I worked on payroll and T&A systems, the basic hours for a year were always assumed to be 1700. This might be a starting point for you.

[JohntheBike]

If you are inside IR35 there are:-

No expenses
No income splitting

there is a lump of money which can only go in 2 directions - to you as salary after tax has been deducted, or into your pension pot (hopefully as salary sacrifice) with no money deducted.

If you want to do the former agency payroll or an umbrella is less hassle, if you want the latter using an umbrella will avoid money disappearing to HMRC as employer NI.

No income splitting

exactly, so if a couple is benefiting from income splitting then the calculators are not taking this into account when calculating the differences.

Interestingly, although my spouse and I appear to be benefiting from income splitting, it would seem that there is very little difference between income levels if I were to be judged as subject to IR35. I guess this has something to do with the levels of PAYE that both of us pay, as well as the low income that I generate. In fact, calculations appear to show that I'd be better off inside IR35 than I am now. I can't really believe this and so I'm a little sceptical about these nett income calculators.

[JohntheBike]

Income splitting only applies outside IR35.

we're talking about nett pay here. Clearly income splitting has an effect on nett pay.

[FIERCE TANK BATTLE]

Has anyone done any fag packet calculations, assuming nothing changes, working the whole year with a few weeks permie style (25 odd days or whatever) holiday, no significant expenses (no significant T&S for example), rate £400 outside = £xxx inside?

I've asked my accountant to help me work out the difference but in the meantime I've been asked to give them a figure for a raise in case I am found inside and I've been wondering about it.