8 ms·
If you want a high salary with minimum fuss (i.e. no management, no clawing your way up a corporate ladder), this is way to do it. I've been contracting in Lond
by flooow 5y ago
If you want a high salary with minimum fuss (i.e. no management, no clawing your way up a corporate ladder), this is way to do it. I've been contracting in London for 5 years. Rates are in the range of £500-£700 per day, never had a problem getting work, post-tax salary equivalent to £200k PAYE. You can often take several months off over the summer too, if you like that sort of thing.
- aix1 5y agoWould you mind expanding on the maths of contracting @ £500-£700 per day working out as equivalent to £200k PAYE?
- flooow 5y agoSure. I just did a 12 month stint at £650/day. Assume 220 working days/year = £143K. Now you have a silly dance to minimise your tax. - Pay yourself minimum wage (0pct rate) ~£9K/year. - You can probably write off around £10K against tax (lunch, transport) - Pay 19% corporation tax on the rest - Pay yourself a dividend up to upper rate, end up paying around 7.5% tax on that - ...probably some other tricks Leads to a total tax rate of around 20-25% as long as you can survive on £50K a year. So net income something like £115K after tax. Say £9.5K/month, would require a gross salary of £194K [0]. This is why the government is trying to clamp down on IR35 abuse, but still plenty of contracts outside, at the moment. [0] https://www.thesalarycalculator.co.uk/lifestyle.php https://www.thesalarycalculator.co.uk/lifestyle.php
- zimpenfish 5y ago> Now you have a silly dance to minimise your tax. Although there is a risk here that HMRC will come after you at some future point when this has been ruled an invalid scheme. Personally I don't think it's worth it and don't tax dodge/minimise/optimise (also a moral stance.)