Are any of you guys contractors or have been recently?
I'm currently 8months into my first contract (they keep rolling my 2months), I took it with my old place a few months after they made me redundant, I'd been in permanent employment my whole life before that.
As it was my first time contracting, I went back on their books under PAYE, and although my contracting rate is pretty good so I'm not moaning, I'm wondering 'how much' better off I'd be going Ltd and them paying me direct?
For example, if I earned 10k per year (lets pretend there's no tax free allowance and no higher rate tax band for a minute), on average I'd pay 25% tax and NI all in, so I'd take home 7.5k and the tax man would get 2.5k. If I went Ltd and paid my own etc and done all the usual of keeping all my receipts for fuel, food, that sort of stuff - how much better off do you think I'd be? All my mates that I ask ask this, I can never get a straight answer, I just want a rough idea - like 'you'd probably pay about 15% all in instead of 25%', to see if it's worthwhile all the ballache. Everyone I ask either dodge the taxman completely, or start blabbering on about taking minimum wage and the rest in dividends etc.
Do any of you contract or know a rough answer to this?
If the answer is significantly less, like 10% total or something stupid, then I'm going to set myself up Ltd and tell them to start paying me direct if my contract at this place keeps running.
I need to find myself a shady accountant that can advise me on all the best scams.
I'm currently 8months into my first contract (they keep rolling my 2months), I took it with my old place a few months after they made me redundant, I'd been in permanent employment my whole life before that.
As it was my first time contracting, I went back on their books under PAYE, and although my contracting rate is pretty good so I'm not moaning, I'm wondering 'how much' better off I'd be going Ltd and them paying me direct?
For example, if I earned 10k per year (lets pretend there's no tax free allowance and no higher rate tax band for a minute), on average I'd pay 25% tax and NI all in, so I'd take home 7.5k and the tax man would get 2.5k. If I went Ltd and paid my own etc and done all the usual of keeping all my receipts for fuel, food, that sort of stuff - how much better off do you think I'd be? All my mates that I ask ask this, I can never get a straight answer, I just want a rough idea - like 'you'd probably pay about 15% all in instead of 25%', to see if it's worthwhile all the ballache. Everyone I ask either dodge the taxman completely, or start blabbering on about taking minimum wage and the rest in dividends etc.
Do any of you contract or know a rough answer to this?
If the answer is significantly less, like 10% total or something stupid, then I'm going to set myself up Ltd and tell them to start paying me direct if my contract at this place keeps running.
I need to find myself a shady accountant that can advise me on all the best scams.
