Hi All,
Long time lurker, never posted before as generally the information here is solid and there is no need to delve any deeper.
However I am in a position where I really could use some advice and I am struggling to find anything online that is relevant.
I have been perm for years, and just started contracting. The work I am starting to do is mainly process review and projects that are long term, but part time (eg set up business reporting, then provide a few days a month to keep it updated and provide support.) So as of next month I will have 3 clients, each one I will be billing between 1-3 days a week. All would be simple to run through my newly created limited as it is all outside IR35, I could do the usual minimum wage / dividend etc structure.
Complication is my perm job wants to keep me part time, which actually suits me great as I would then have guarenteed income alongside contracting making the whole transition easier. Problem is that would be PAYE salary.
So I would have PAYE job - say £26k a year.
Then be billing £450 a day for 3 or 4 days a week.
Question is, is there any benefit to me paying minimum wage salary (avoid NI costs at least) via limited, then pay the rest in dividends? Or just pay it all in dividends? I have spoken to 2 accountants, both useless as they really only know how to deal with contractors or permies, not how to do a mix of the two. They both seem to come up with take home numbers for the ltd work that seems far too high and both ignored dividend tax at all.
Am I correct in my assumptions that the following would happen (ignoring expenses etc)
450pd
Less 20% corp tax = 360
Then dividend tax at £117 (due to being a higher rate tax payer YTD)
So take home £243, or around 54%, this being really low due to the perm role.
I know expenses will change this, as will some dividends be at only 7.5% but I would rather set expectations low than high.
Or does anyone know a good resource for doing a mixture?
Many thanks
Long time lurker, never posted before as generally the information here is solid and there is no need to delve any deeper.
However I am in a position where I really could use some advice and I am struggling to find anything online that is relevant.
I have been perm for years, and just started contracting. The work I am starting to do is mainly process review and projects that are long term, but part time (eg set up business reporting, then provide a few days a month to keep it updated and provide support.) So as of next month I will have 3 clients, each one I will be billing between 1-3 days a week. All would be simple to run through my newly created limited as it is all outside IR35, I could do the usual minimum wage / dividend etc structure.
Complication is my perm job wants to keep me part time, which actually suits me great as I would then have guarenteed income alongside contracting making the whole transition easier. Problem is that would be PAYE salary.
So I would have PAYE job - say £26k a year.
Then be billing £450 a day for 3 or 4 days a week.
Question is, is there any benefit to me paying minimum wage salary (avoid NI costs at least) via limited, then pay the rest in dividends? Or just pay it all in dividends? I have spoken to 2 accountants, both useless as they really only know how to deal with contractors or permies, not how to do a mix of the two. They both seem to come up with take home numbers for the ltd work that seems far too high and both ignored dividend tax at all.
Am I correct in my assumptions that the following would happen (ignoring expenses etc)
450pd
Less 20% corp tax = 360
Then dividend tax at £117 (due to being a higher rate tax payer YTD)
So take home £243, or around 54%, this being really low due to the perm role.
I know expenses will change this, as will some dividends be at only 7.5% but I would rather set expectations low than high.
Or does anyone know a good resource for doing a mixture?
Many thanks
Comment