Can you work out how much you owe based on day rate?

[notsofun]

Hey guys ,

I earned £80k in 2010-2011 based on my day rate. The discovery leter I got was for £22k . Is this correct ? I never thought to query it as people said the amounts HRMC were sending were about right , but meeting up this weekend with people in the same scheme (WC) their numbers are significantly lower.

I'm just after an estimate based on £80k

Thanks all.

[notsofun]

I should have made it more clear. The £80K was gross based on a day rate of £325 per day. It was not the loan amount.

[BrilloPad]

Were you limited, via umbrella or sole trader?

How did you pay yourself? What amounts did you pay yourself? What tax and NI did you pay?

Did the discovery letter give any calculations?

[notsofun]

Were you limited, via umbrella or sole trader?

How did you pay yourself? What amounts did you pay yourself? What tax and NI did you pay?

Did the discovery letter give any calculations?

Was via white collar, umbrella. I'll have to check the notice I received. How much tax should you pay on the Loan amount? I can probably find the loan amounts.

[BrilloPad]

I found this CUK thread http://forums.contractoruk.com/hmrc-...te-collar.html

So looks like you took out about £80k as a loan and paid no tax?

w ww.taxpenny.co.uk/news/2009/11/20102011-tax-calculator/ - 2010/2011 Tax Calculator*|*TaxPenny News gives £21822 and £4814 of NI.

[chubacabra]

I was with WC and with mine they factored in the amounts earned from the PAYE part of it. If I remember the salary part was about 15k per year...

So you need to include that in any calculations because the salary element would have eaten into your personal allowances.

Bear in mind income tax would have been paid on the salary element also.

If you've received the discovery letter from HMRC there should be a breakdown of how they have worked it out.

[notsofun]

I was with WC and with mine they factored in the amounts earned from the PAYE part of it. If I remember the salary part was about 15k per year...

So you need to include that in any calculations because the salary element would have eaten into your personal allowances.

Bear in mind income tax would have been paid on the salary element also.

If you've received the discovery letter from HMRC there should be a breakdown of how they have worked it out.

looked at the notice and it said Pay, pensions ,profit £44300 @ 50% = the 22K

so looks like the loun amount is £44K? Do these loans get taxed at 50%?

[chubacabra]

10/11 tax year allowances were:

Personal Allowance: £6475
Basic Rate (20%) £35000
Higher Rate (40%) up to £150000
Even Higher Rate (50%) over £150000

Only reason you'd be taxed at 50% is if your income was over £150,000 for that year not including the loan.

If not look at your overall income for that year - that includes income from anywhere else that you put on your tax return - e.g. rental income from a property and then use the above allowances to see where you're at.

[famousfive]

When I spoke at White Collar the rough formula I got was: take your daily rate in your case £325 * 45 weeks – 12.5% fees - £15k salary gives you the outstanding tax according to HMRC … then go to w ww.listentotaxman.com/ to see tax due

THEN add interest

HMRC Calc Tax Due = (Loan amount for open years x 0.375)

Interest = HMRC Calc Tax Due x 0.25

Thanks again White Collar

[famousfive]

It might be worth checking if the £22k discovery letter covers all the years you were with White Collar, and before them ASMG and not just 2010/11