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Good point, actually. I suspect the OP is failing to distinguish between company and personal money. 80% of income is not unreasonable if you stay under HRT, allowing for expenses. 80% of company gross is unrealistic or illegal...
My accountant promised me 80% take home but now when I calculate my actual income it is 60% of what I am gettting so If I get 500 pounds per day my corporation tax is about 20% and tax on my dividend is about 20% so actual take home is 300 pounds perday but accountant is saying it is 80% as your take home is 400 pounds...
Can some one please tell me if he is correct?
You are taking home about 80% of company net profits. You are indeed only paying about 20% of your gross income in tax. But of course the company is not free to pay you all of its income as dividend, not until the company has paid tax on its profit.
Did he promise you that you would take home 80% of billing? If so, he is a liar. If he merely said you would take home 80% and left you to assume that he meant 80% of billing, then he is not a liar but rather some different sort of slimy dishonest reptile. Apologies to all decent reptiles.
Sounds like the usual sales guff that many number bods and umbrella shops try to pedal.
My net income last year was around 72%
(calculated as: invoices - ltdco running costs - commuting costs - paye+ni - corp tax - extra self assessment)
But... some of that money has been held in ltdco (to avoid higher rate tax on extraction) and some put into a pension, but I count it as net income because it is still mine and not Hector's.
The part you have left in the company is not yours
Sounds like the usual sales guff that many number bods and umbrella shops try to pedal.
My net income last year was around 72%
(calculated as: invoices - ltdco running costs - commuting costs - paye+ni - corp tax - extra self assessment)
But... some of that money has been held in ltdco (to avoid higher rate tax on extraction) and some put into a pension, but I count it as net income because it is still mine and not Hector's.
Last edited by moorfield; 12 November 2009, 22:36.
My accountant promised me 80% take home but now when I calculate my actual income it is 60% of what I am gettting so If I get 500 pounds per day my corporation tax is about 20% and tax on my dividend is about 20% so actual take home is 300 pounds perday but accountant is saying it is 80% as your take home is 400 pounds...
Can some one please tell me if he is correct?
Will your accountant sign a contract to guarantee that you will get 80%??
No??
You wont be getting 80% then.
Better find some expenses to bump up your take home.
My accountant promised me 80% take home but now when I calculate my actual income it is 60% of what I am gettting so If I get 500 pounds per day my corporation tax is about 20% and tax on my dividend is about 20% so actual take home is 300 pounds perday but accountant is saying it is 80% as your take home is 400 pounds...
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