It sounds like you’re determining yourself as inside IR35.
Are you public sector?
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Self-employed & Coronavirus
- Thread starter Ric
- Start date
It sounds like you’re determining yourself as inside IR35.
Are you public sector?
sir baconface
Well-Known Member
This. They are probably not allowing for Corporation Tax and tax on dividends.Can't be legal then. Been working as a contractor for many years and you just put your invoices through your books and get charged CT at 19% on profits and 7.5% on dividends taken out (except for the first £2k). You then pay income tax at the same rate as everyone else on total income (salary + dividends) above the £12.5k rate. It really isn't much different than an employee, the benefit is you can charge more per day because they can get rid of you whenever they want, that's the risk. Plus you can get sued. If people want job security, get a normal job, but there's no magical 10% rate I've ever seen. It could be that people calculate their income tax bill after SA at about that rate but they're forgetting they've paid CT and Div tax as well.
TheRemainsOfTheDave
Well-Known Member
- Joined
- 16 Mar 2017
- Messages
- 6,491
What I said is nothing to do with IR35, that is decided per contract and how the contractor works on that contract, specifically how independent you are able to work.It sounds like you’re determining yourself as inside IR35.
Are you public sector?
OB1
Well-Known Member
Are you your own ltd co.?
I am and I am a qualified accountant.
You are wrong.
What's left of Dave is right.
What I said is nothing to do with IR35, that is decided per contract and how the contractor works on that contract, specifically how independent you are able to work.
And that decides what tax you pay.
If you’re judged as inside you pay additional, plus NI, holiday etc.
Lads read this-
https://www.companybug.com/what-is-the-financial-cost-of-ir35/
The cost of IR35
The difference between the take-home pay of a contractor inside and one outside IR35 is significant. The difference is over £8,445 per year due to the increased income tax and NICs payable on income. In this example, you'd earn around 20% less if you are caught by IR35.
https://www.companybug.com/what-is-the-financial-cost-of-ir35/
TheRemainsOfTheDave
Well-Known Member
- Joined
- 16 Mar 2017
- Messages
- 6,491
Possibly. I'm forgetting you only pay the additional tax above what an PAYE employee would pay so it always looks like you're paying very little.This. They are probably not allowing for Corporation Tax and tax on dividends.
sir baconface
Well-Known Member
Ah, you didn’t say that before. Between you, can you please post an explanation of how it works?Well my Mrs is Chartered ACA and says I’m correct.
OB1
Well-Known Member
Well my Mrs is Chartered ACA and says I’m correct.
If your missus thinks contractors only pay 10% tax on their earnings, she needs to do more CPD.