Total tax on £100k under IR35 Total tax on £100k under IR35
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  1. #1

    dodo73

    Guest

    Default Total tax on £100k under IR35

    I have calculated that a contractor earning £100k in 2002-03 pays £38,849.89 tax and national insurance under IR35. Can someone please confirm this?


    I've calculated it as follows:
    After 5% for expenses: £95,000.00

    A 'deemed' payment of £85,462.97
    Employers NI of £9,537.03 (11.8% above £89 per week)

    Tax of £26,726.57 (including a personal allowance of £4,615)
    Emplyees NI of £2,586.29 (10% of £496 per week)

    Total £38,849.89 = £9,537.03 + £26,726.57 + £2,586.29

  2. #2

    fiddleabout

    Guest

    Default

    You've forgotten to take out any other allowable schedule E expenses (travel, subsistance, etc.)

    Hypothetical question anway - get outside IR35. Lower gross rate outside can easily beat a caught contract.

  3. #3

    dodo73

    Guest

    Default

    The only travel expense most contractors face is the travelcard for getting to/from work. Can this be claimed as an expense ON TOP of the 5% already calculated? And what is subsistance?

    After reading the IR35 legislation and other documents, I would say that I and ALL the contractors I've ever worked with would be caught 'plumb' by IR35. Maybe you can have a written contract which doesn't reflect your working arrangements, or simply ignore IR35 and hope you don't get caught (which I've been doing for the past 3 years). But I'm starting to think that is tax-evasion, and not just tax-minimisation. You shouldn't cheat on your tax, even if you won't get caught.

  4. #4

    fiddleabout

    Guest

    Default

    Subsistance is out of pocket expenses for food and drink and would be small and probably not worth claiming (I've never bothered).

    Whether or not you can claim travel depends on time at the same place. In broad brush term < 2 years means you claim. If you are only talking about tube fares then it's probably not worth the effort but many contractors travel long distances by car and that most certainly is worth claiming as is ad hoc or even regular long distance train and air travel.

    If you can't be bothered to work out how to legitimately avoid being caught by IR35 that is entirely your affair. I'm outside and have no intention of taking any work that would place me inside.

  5. #5

    WWW ITDoctors co uk

    Guest

    Default

    But I'm starting to think that is tax-evasion, and not just tax-minimisation. You shouldn't cheat on your tax, even if you won't get caught.
    Yea right - like the tax system is so fair in this country, we get all those employment benefits and of course we should pay employers and employees NI.

    If you fee so guilty, calculate the tax you haven't paid over the last three years and make a cheque payable to Gordon Brown - I'm sure he will be most greatful.

  6. #6

    zeitghost

    Guest

    Default

    Grateful.

    And the bastard will cash it.

    Like the 75p cheque some pensioner sent him.

  7. #7

    fiddleabout

    Guest

    Default

    > Grateful.

    Yellow card for zeit - muscling in on fleet's job. Don't let it happen again!

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