Giant - any other comments?
Hi thre,
Yep I agree - whilst they have their place I have NOT enjoyed using them. It is like dealing with the Borg!! They are a company without face or personality and trying to get any kind of personal response from them is almost impossible if you have a problem.
Their input systems as cumbersum and not user friendly..... I didn't want to use them in the first place and am VERY glad that I am leaving them at the end of this week!!!
Avoid... also avoid Computer People who seem to think they have a right to MAKE you use them. I learn the hard way but I will know better for the future...
Karen
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Reply to: Giant Powerhouse Composite
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Previously on "Giant Powerhouse Composite"
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Originally posted by twoplusfourI'm also shocked that Giant didn't make this clear when I signed up. Their stance was, "you get to keep 80%". Could have been a nasty surprise if I hadn't researched.
How does tax work on the dividends I receive from powerhouse?
Dividends are paid net of tax for basic rate taxpayers i.e. there is no further liability for basic rate taxpayers to pay any tax on them. If you are a higher rate taxpayer you pay tax at 32.5% (less the 10% tax credit) on dividends, so you need to pay additional tax when you submit your self-assessment return.
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Dividends = Salary
I've heard that the Revenue are using 2003 legislation to re-classify dividend income from composites as salary.
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Originally posted by planetitYes. Never ever have anything to do with Giant.
If you are new to business and don't understand taxation etc then your options are.
1) Limited Company with a good accountant who runs your life for you while you learn.
2) Umbrella where you are a PAYE employee only claiming for receipted expenses.
If you understand the UK taxation laws you can always try these options instead
1) Limited Company with less involvement by accountant (really he's just a sanity check)
2) Composite where you can take advantage of the dividend payments.
Never ever use a composite until you understand UK income tax laws completely as guess what they employ people much less qualified than yourself and you expect them to get these things right? Hold on if you do expect them to get it right maybe you deserve them!
Ultimately composites have a limited shelf life but no-one knows if thats 1 year or 50 years.
But if you know what should be happening with your income you can at least shout when it doesn't happen
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Any other comments on Giant, and composites in general?
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Composites - don't use them. You get better returns from your own LtdCo and Gordon isn't threatening to close them down (yet!) on the basis that a comp is a clear tax avoidance device, not a genuine business.
IR35 - Comps offer no greater protection than LtdCo, you have to jump the same hoops and have suitable conracts to back up the hoop-jumping. If you go with an umbrella, you're IR35 caught anyway in effect, since you become an employee.
Usual advice for the newcomer applies. Read the first time guide on this site. Read the one on the PCG site (www.pcg.org.uk). Join the PCG anyway. Stay away from composites and anything that says "Offshore" or "Dispensation". Keep your eyes open at all times.
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I think I've got it now! -thanks TaZMan and ASB.
I'm also shocked that Giant didn't make this clear when I signed up. Their stance was, "you get to keep 80%". Could have been a nasty surprise if I hadn't researched.
I've only been contracting since Nov, so I'll be under the 40% threshold this year. But essential knowledge for the future, so thanks again.
Now that's sorted -
Any other comments on Giant, and composites in general?
IR35 for example?
Just out of interest really, there seems to be some well-informed and helpful people around here.
Thanks again.Last edited by twoplusfour; 9 March 2006, 17:20.
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There quite a lot of info as to how the tax system works here.
http://www.hmrc.gov.uk/
It's not rocket science. Assuming you are uk resident, ordinarily resident and domiciled then UK operates a mondiale tax system. i.e. it seeks to tax you on your worldwide income. The actual bands are here:-
http://www.hmrc.gov.uk/rates/it.htm
Now income over 32.4k taxable attracts tax at 40%. The dividends will attract a tax charge of 25% for any portion of them that falls into the higher rate band (because only BR credit is obtainted).
"Is that 25% applied to all my income, or just to income over and above the 34K threshold? Or just to income paid in dividends? Or just income paid through Giant?"
None of the above. It's paid to income where it has not been deducted.
In your case where total salary + total divis (from all sources) > 37,435 then you will have to pay 25% of the excess. (This assumes that total salary <= 37,435 and paye has actuall been correctly calculated).
You can find a number of on line tax calculators which enable you to put in your numbers. Then take off what you have paid and bingo that's what due.
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I am shocked at how few umbrellas/composites actually tell their members this.
Yes, once you're over the 40% income tax threshold, you must pay additional tax on any further dividends above this level (not on the amount below this level). The dividend paid to you already includes a certain allocation for this tax, and so that is why you pay approx. 25% of any amount over the 40% income threshold as extra tax.
This additional tax is paid the financial year following payment of the dividend, and it must be declared in your annual Tax Self Assessment.
Overall this will reduce your return to somewhere around 65%, depending on your earnings.
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Giant Powerhouse Composite
Hi, I'm new
I'm currrently contracting through Giant Powerhouse , and recently came across a very informative thread on this here forum:
http://forums.contractoruk.com/archi...hp/t-1089.html
So as far as I undersand, Giant Powerhouse is a Composite company scheme; I am an employee and a shareholder, and get paid a basic wage (minus tax and empee N.I.), plus a shareholder dividend (minus corp tax and emper N.I.). With benifits included, this equates to a net take-home of 80% of gross.
But to misqoute a commentor in the thread above, "if my total income for the tax year exceeds £34K, I then become liable for an extra 25%."
So I'm seeking some clarification and detail on this statement, (and to Giant's composite scheme in general):
Is that 25% applied to all my income, or just to income over and above the 34K threshold? Or just to income paid in dividends? Or just income paid through Giant?
Any advice and info greatly appreciated. If you need clarification on anything I'll be happy to supply.
Thanks.Tags: None
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