Originally posted by ladymuck
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Corporation tax and Dividends
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Last edited by jayn200; 5 December 2020, 10:34. -
Originally posted by jayn200 View PostAre you a 1 or 2 director company? I think this also makes a big difference. Since it's easy to imagine someone needing more than 47k or whatever their post tax take home would be some years. For 2 director husband wife company though you have to be a living a fairly lavish lifestyle to go out of basic rate. Most will even be accumulating personal savings.
Quite a sweeping statement to claim that two people wanting to take home more than £47k each is a lavish lifestyle.Comment
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Originally posted by ladymuck View PostQuite a sweeping statement to claim that two people wanting to take home more than £47k each is a lavish lifestyle.Comment
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"In truth, comparing the tax take from a contractor and an employee earning the same amount creates an inaccurate representation, because contractors typically charge considerably more than employees are paid. "
Originally posted by Lance View PostAnd it fails to consider that a contractor gets paid a LOT more than an equivalent permie.Comment
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Originally posted by ladymuck View PostI'm solo. I have only gone into the higher bracket a few times, and never for investment I hasten to add (I just know people who have).
Quite a sweeping statement to claim that two people wanting to take home more than £47k each is a lavish lifestyle.Comment
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Originally posted by jayn200 View PostYeah i guess if they have big family and a couple cars might not be that lavish. I am just think about myself living in central London with no vehicle and just my wife. But yeah i guess depends on individual circumstances.Comment
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The main reason for dividends for me was avoiding employers NI, income levelling and sharing of tax allowance with my wife. If I could have kept income levelling and lost the other two, I would not have objected to IR35. It was the insistence that the full fee (less 5%) was subject to NI that I found unwarranted.
For the last fifteen years in another tax jurisdiction, I've been able to income level. And been very glad of it during the lean years. It's that income levelling that compensates for neither sick nor holiday pay.Down with racism. Long live miscegenation!Comment
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A little surprised that some people are angered by the article and seek to contradict it with passion alone. The belief we live in tax Shangri-la is well embedded, perhaps due to memories of early 90's London yuppie contractors avoiding tax (which was true at the time. People left my company to go contracting in London and were indeed avoiding mountains of tax, and didn't mind telling you so).
Personally I didn't become a contractor (in 2006) with the aim of avoiding tax, and was not aware of any substantial (legal) tax advantages. Nor have I bothered with tiny things like buying a webcam on expenses. No, I was attracted by the rate, experience and life style, and the fact that permy career paths weren't great for engineers. Guessing most contractors are the same. As it panned out I achieved the independent life style, but not earned more than I would in permy land, all told.
If anyone doubts the situation, please call and advise how tax can be saved. You'll get 30% of the margin per annum (all at my discretion).Last edited by unixman; 5 December 2020, 13:14.Comment
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Originally posted by jamesbrown View PostI don’t think you can describe 100k as supporting a lavish lifestyle in London, fullstop, unless we have a very different understanding of lavish.
How much do you think central London is? You can get a nice 2 bed flat for 3k a month. That leaves 5k if you don't drive where is that money going? To spend 200 a day is an extremely excessive lifestyle.Comment
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Originally posted by jayn200 View PostIt's over 8k a month.
How much do you think central London is? You can get a nice 2 bed flat for 3k a month. That leaves 5k if you don't drive where is that money going? To spend 200 a day is an extremely excessive lifestyle.
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