New take home calculator

[tom at seamless]

Don't want to rain...

But why inside IR35 income has anything to do with your company in your calculator? If you are inside in public sector then you are effectively a temp employee of your client or umbrella (without rights) and the money you receive is your salary and has nothing to do with your company books.

In private sector I think there is 5% relief that you can use towards running costs of your company.

Hi. For public sector IR35 contracts (and private sector for everything other than small company clients next year) there are two options: umbrella or deemed payment. The calculator is modelling the deemed payment where invoice income, salary and any other expenses still gets recorded through the company, but the PAYE and NI on that salary is deducted at source by the fee payer.

Keeping the ltd open and running deemed payment is not a particularly common choice where the only contract the PSC has is public IR35 (and is sometimes not supported by the end client) but the calculator helps understand and compare the impact of doing so against outside/private contracts - and even alongside outside/private contracts if you want to do so. The results of the calculation also won’t be a million miles away from what you’d get from an umbrella, you just need to account for the umbrella fee (rather than an accountant’s fee) in the sales edit page.

The calculator also models things that the at source deduction won’t account for, e.g. student loan deductions, and the fact that although as you quite rightly say there’s no 5% expense allowance, a company running a deemed payment does still have admin expenses and therefore can’t usually withdraw the whole amount that they have paid deductions against.

The private sector calculations do indeed take account of the 5% general admin allowance. If you enter private IR35 sales then the calculator will automatically do the deemed payment calculation and allocate it as salary (you can click on the deemed payment figure to see the calculation).

Cheers.

[elsergiovolador]

Hi. For public sector IR35 contracts (and private sector for everything other than small company clients next year) there are two options: umbrella or deemed payment. The calculator is modelling the deemed payment where invoice income, salary and any other expenses still gets recorded through the company, but the PAYE and NI on that salary is deducted at source by the fee payer.

Keeping the ltd open and running deemed payment is not a particularly common choice where the only contract the PSC has is public IR35 (and is sometimes not supported by the end client) but the calculator helps understand and compare the impact of doing so against outside/private contracts - and even alongside outside/private contracts if you want to do so. The results of the calculation also won’t be a million miles away from what you’d get from an umbrella, you just need to account for the umbrella fee (rather than an accountant’s fee) in the sales edit page.

The calculator also models things that the at source deduction won’t account for, e.g. student loan deductions, and the fact that although as you quite rightly say there’s no 5% expense allowance, a company running a deemed payment does still have admin expenses and therefore can’t usually withdraw the whole amount that they have paid deductions against.

The private sector calculations do indeed take account of the 5% general admin allowance. If you enter private IR35 sales then the calculator will automatically do the deemed payment calculation and allocate it as salary (you can click on the deemed payment figure to see the calculation).

Cheers.

Thank you for explanation! I understand public sector inside contract you cannot run company expenses against the payment as that is already your (employee) money after tax and if it is paid as taxed dividend you don't even need to put it on your self assessment. You can of course make a loan to your company to cover running expenses but that is likely a whole lot of mess. It's probably better to ask accountant for such arrangements.

[Lance]

PABKAC

Quite possibly. Isn’t that the point of a beta though?

[tom at seamless]

Some updates...

Thanks again for taking the time to check this out and share your thoughts, it has been really useful.

We've made a few changes over the last couple weeks off the back of your feedback:

• Income slider now goes to 200k
• When income reaches a level that triggers VAT it prompts to choose the scheme
• If you want to ignore VAT completely then you can select 'Not registered' and enable the switch to stop it from calculating VAT over the threshold
• Salary and dividend amounts can now be fixed at a specific amount, which has made the 'Recalculate drawings' switch redundant. You do this by clicking into the input field(s)
• Dividends can be limited to tax free, basic rate, higher rate, etc with a warning if you manually change them to an amount that exceeds that level

https://seamless.tax/contractor-tax-calculator

I'm now looking at bringing some of the additional director/employee/shareholder options from the Xero connected app into this calculator so will keep you updated when that's available.

[elsergiovolador]

There is a bug. If you change the tax year, it doesn't retain your settings but resets the sliders.

[sojan]

Hey.

Probably not the best timing I know, but I have put together a take home calculator so if anyone finds themselves with some free time I'd really appreciate some feedback.

https://seamless.tax/contractor-tax-calculator

It's pretty flexible in terms of letting you vary the inputs, and caters for both outside and inside IR35 (private and public sector) contracts. All the tax calculations can be drilled down on to see on what basis they are calculated - so let me know if I've got anything wrong!

Many thanks
Tom

I liked it. Few suggestions

- May be a toggle switch for Inside/Outside IR35 and calculate accordingly
- a Would be equivalent Permie salary just to do a heads-up comparison (towards the end).
- The constraints of Total income < sum of (salary + dividend + expenses) may not be correct in all cases. May be default it to not-constraint?

Out of curiosity, which software did you do this? Angular/node/React etc..?

[tom at seamless]

I liked it. Few suggestions

- May be a toggle switch for Inside/Outside IR35 and calculate accordingly
- a Would be equivalent Permie salary just to do a heads-up comparison (towards the end).

Many thanks.

To allow for the fact that people may have both inside and outside income in the same year we have put separate income categories for each, but I can see how it would be useful to quickly switch the income from one to the other without having to input it again. I'll have a think about that.

One really useful thing we offer (I hope) is that having got the take home for outside income, you can then click on that take home figure and have the calculator reverse calculate the IR35 sales (public or private) required to achieve that home home. If you then click into the income field you can see the equivalent day/hourly rate and can even get it to add back on the employer deductions for NI and apprenticeship levy to see what some agencies refer to as the 'assignment rate'.

- The constraints of Total income < sum of (salary + dividend + expenses) may not be correct in all cases. May be default it to not-constraint?

Do you mean that it should be possible to have loss? If so, then if the salary and dividends figures are set to specific amounts then it will maintain those even if that results in a loss.

Out of curiosity, which software did you do this? Angular/node/React etc..?

Vue.js for the frontend with Laravel framework for the backend

Cheers