Income calculation

[kevinlam]

The parasol calculator's end result includes "holidays" of 41 days roughly. Does that mean in reality, the monthly payment will be higher than it says on the calculations?

[LisaContractorUmbrella]

Seriously, if your rate is over 200 a day no one should be working through a brollie. Its really that simple.

Brollies are for people of low rates or who are just starting contracting, dont know whether its for them so dont want to set up a limited co.

Just say 'No!' to brollies.

Actually BB that's simply not true - we have contractors working with us who earn way in excess of £450 per day but they don't want the hassle of running their own company for whatever reason - they understand the financial advantages but it's just not for them.

[SueEllen]

WMS. Plus, provided you do your homework and get your contract checked over there is no reason why you should be inside IR35 anyway. In the IR35 scenario it tends to be expenses that make the difference and some creative use of expenses claims can inflate your income considerably. Just because the brolly allows you to claim an expense does not mean HMRC will see it the same way. How many regular employers do you know who let you claim for lunch or breakfast at your normal place of employment? This is the standard HMRC will apply should they decide to take an interest, and it is your responsibility, not the brolly's, to show that everything you claimed was legitimate.

The "normal place" of employment for a contractor is normally their home. The reason you can claim travel expenses etc. is because a client site it's a temporary place of employment. If you were ever a permie who worked at different sites or went to off-site meetings you would know this.

[DaveB]

If you are with an umbrella, IR35 doesn't apply. Also, between Parasol and ContractorCalculator, which one is trying to sell you an umbrella service?

They all work to the same tax rules so all else being equal they can only give the same results. If you get different results, someone clearly isn't comparing like for like.

WMS. Plus, provided you do your homework and get your contract checked over there is no reason why you should be inside IR35 anyway. In the IR35 scenario it tends to be expenses that make the difference and some creative use of expenses claims can inflate your income considerably. Just because the brolly allows you to claim an expense does not mean HMRC will see it the same way. How many regular employers do you know who let you claim for lunch or breakfast at your normal place of employment? This is the standard HMRC will apply should they decide to take an interest, and it is your responsibility, not the brolly's, to show that everything you claimed was legitimate.

[malvolio]

Well the contractor calculator shows similar results only if you select outside ir35. But parasol gives you much more if you are inside ir35?

If you are with an umbrella, IR35 doesn't apply. Also, between Parasol and ContractorCalculator, which one is trying to sell you an umbrella service?

They all work to the same tax rules so all else being equal they can only give the same results. If you get different results, someone clearly isn't comparing like for like.

[kevinlam]

Well the contractor calculator shows similar results only if you select outside ir35. But parasol gives you much more if you are inside ir35?

[escapeUK]

WHS

A umbrella company is in terms of wasting money.

I was with Parasol at first, and this is 100% true.

[SueEllen]

Cripes, on £450 a day, you're chucking 000's down the pan!!!! Go LTD FFS.

WHS

A umbrella company is in terms of wasting money.

[Fred Bloggs]

Cripes, on £450 a day, you're chucking 000's down the pan!!!! Go LTD FFS.

[Wanderer]

Bolshie is right, don't go brolly, especially on £450/day.

You're going to bring in about 100k/year and pay about 40% of that in tax through an umbrella. This can be reduced to < 30% straight away if you go LTD (that's an extra 10 grand in your pocket) and even lower still with a bit of tax planning like retaining some money in the LTD, putting it in a pension, splitting the income with a spouse/partner etc.

If you are a bit daunted by the whole LTD company route then join the PCG and get them to set up up with a package of accountancy, insurance, IR35 review etc and it can all be done for you. Running a limited IS a bit more admin but the amount of tax you can save more than makes up for this.

To be completely fair to umbrellas, if you are only going to be contracting for a few months or you really don't want to do the limited company thing just yet then go umbrella and you can have a quiet life (albeit at a huge expense in extra tax). You can always opt for a LTD at next contract renewal time and change over then.

[DaveB]

Hi,

I found that there is a significant differences betwwen the calculator in parasol and the one in contractorcalculator web site ?

Take the example of 450 a day, Parasol gives over 100k gross and take home is 6xxx a month whereas the other site gives 70k gross and 4xxx a month?

Which one is correct?

Not sure what figures you are putting into them but at 450 day and no expenses or pension Parasol gives 5539 Month and ContractorCalculator 5318.

Parasol work on 4.3 weeks per month, CC on 4. Adjusting for that and the fee's parasol take it works out about the same.

[VectraMan]

Take the example of 450 a day, Parasol gives over 100k gross and take home is 6xxx a month whereas the other site gives 70k gross and 4xxx a month?

Which one is correct?

I imagine both are correct. Just tried the parasol one and it's assuming working 52 weeks a year ; the other probably has a more realistic estimate.

[BolshieBastard]

Hi,

I found that there is a significant differences betwwen the calculator in parasol and the one in contractorcalculator web site ?

Take the example of 450 a day, Parasol gives over 100k gross and take home is 6xxx a month whereas the other site gives 70k gross and 4xxx a month?

Which one is correct?

Seriously, if your rate is over 200 a day no one should be working through a brollie. Its really that simple.

Brollies are for people of low rates or who are just starting contracting, dont know whether its for them so dont want to set up a limited co.

Just say 'No!' to brollies.

[kevinlam]

Hi,

I found that there is a significant differences betwwen the calculator in parasol and the one in contractorcalculator web site ?

Take the example of 450 a day, Parasol gives over 100k gross and take home is 6xxx a month whereas the other site gives 70k gross and 4xxx a month?

Which one is correct?