SJD Calculators Ltd vs Umberalla

[Ivor1]

I thought if I went PAYE through my ltd I would still take home more than a PAYE umberalla, plus with my ltd I could get benefit from the flat rate VAT scheme.

However Ive just taken figures from the SJD site, the first lot from the umberalla calc and the second lot from there Payslip calc. The payslip 1 shows the employers NI so I excluded that off the net pay.

Whats confused me though is their umberalla service makes someone grossing £8k amonth (not me) over £400 amonth better off than PAYE through ltd. Does the Director NI thing mean your worse off going PAYE through a ltd ? confused ...

Figures are based on £8k amonth gross (excluding VAT)

Umberalla calc http://www.contractorumbrella.com/calculator.html

Your Gross 8000
Employers NI 849.12
Employees NI 304.14
Employee Tax 2,146.53
Total All Tax 3,299.79
Fees 62.50
Total Net Income 4,637.71


Payslip ie via LTD PAYE

Your gross pay is 8000
Your PAYE tax deduction is 2511
Your NI deduction is 313
Your employer's contribution is 970
Your Net 4,206

Whats the difference ?

[malvolio]

Umbrella fees come out of gross, so reduce the taxable amount. However, with LtdCO you don't pay yourself £8k pcm gross, you pay somewhat less and take the balance as divis, so reducing the NI charges significantly.

You're not comparing like with like. Read Simon's sticky at the top of this thread.

[Ivor1]

Umbrella fees come out of gross, so reduce the taxable amount. However, with LtdCO you don't pay yourself £8k pcm gross, you pay somewhat less and take the balance as divis, so reducing the NI charges significantly.

You're not comparing like with like. Read Simon's sticky at the top of this thread.

Im talking about still using my own LTD, but not paying divs just PAYE all the way as Im inside IR35.

[malvolio]

... as Im inside IR35.

Bet you aren't...

Anyway, don't know in that case. Why not email Simon and ask him?

[Nixon Williams]

Having your own limited is only cost efficient is you are outside IR35 not inside - at least for most of your contracts. Otherwise, you are better off using a brolly simply because its' a lot less hassle not because you'll necessarily save any money. Best route is to find a brolly that will do you sole trader (without the EB knowing)

Whilst I agree an umbrella might be slightly less hassle, it is certainly not more cost efficient.

Alan

[VectraMan]

Payslip ie via LTD PAYE

Your gross pay is 8000
Your PAYE tax deduction is 2511
Your NI deduction is 313
Your employer's contribution is 970
Your Net 4,206

Whats the difference ?

The SJD one is working out as if you're a permie who earns £8000 as salary (i.e. £8000 after employers NI). When I put in £7030 per month (i.e. as if you were a contractor paying the employers NI), I get:

Your gross pay is 7030
Your PAYE tax deduction is 2123
Your NI deduction is 304
Your employer's contribution is 846
Your Net 4,603

Where the other £34 goes to I don't know.