Newbie - Query

[muralijv]

Hi ,

I am a newbie to this forum. I have been contracting since last may. Kindly someone can advice me how dividends , CT , ETC works and can be calculated.

my accountant is of no use . I am planning to change.

To get a basic understanding:

per day = £300
( approx) 22 Days in a month = £300 * 22 = £6600 Per Month
Vat 20% = £1320
total Monthly billing = £6600 + £1320 = £7920.00
Per Annum = £7920 * 12 = £95040

Could someone explain to me how dividends can be calulated and Tax Free allowance and Corporation Tax.

Your help is much appreciated.

Regards
Murali

[NotAllThere]

You have been through the links on the left - First Timers etc. - haven't you?

[mudskipper]

You have been through the links on the left - First Timers etc. - haven't you?

.... Or even the links on the right --------------------->

[cojak]

Here you are

http://www.contractoruk.com/calculators/

Put your figures through these calculators, that's all we'd do for yo after all

Also look at this
Tax, payroll and company information | Business Link

[Danielsjdaccountancy]

Hi ,

I am a newbie to this forum. I have been contracting since last may. Kindly someone can advice me how dividends , CT , ETC works and can be calculated.

my accountant is of no use . I am planning to change.

To get a basic understanding:

per day = £300
( approx) 22 Days in a month = £300 * 22 = £6600 Per Month
Vat 20% = £1320
total Monthly billing = £6600 + £1320 = £7920.00
Per Annum = £7920 * 12 = £95040

Could someone explain to me how dividends can be calulated and Tax Free allowance and Corporation Tax.

Your help is much appreciated.

Regards
Murali

Hi Muali,

Sure.

The income comes into the company as turnover and from this you have option of taking a salary and pension contributions directly from the company, it’s also at this point that the expenses are offset.

After this, what is left is called the net profit; this is subject to corporation tax at 21%/20% depending on the crossover of the tax year.

Once corporation tax is taken off the rest generally can be taken as dividends.

Talk to your accountant about the level of dividends to take though so they keep it as tax efficient as possible for you as it may be a better idea keeping some funds in the company depending on how long you decide to contract for.

This is a very basic breakdown but should hopefully help give an understanding.

[kaiser78]

Hi ,

I am a newbie to this forum. I have been contracting since last may. Kindly someone can advice me how dividends , CT , ETC works and can be calculated.

my accountant is of no use . I am planning to change.
To get a basic understanding:

per day = £300
( approx) 22 Days in a month = £300 * 22 = £6600 Per Month
Vat 20% = £1320
total Monthly billing = £6600 + £1320 = £7920.00
Per Annum = £7920 * 12 = £95040

Could someone explain to me how dividends can be calulated and Tax Free allowance and Corporation Tax.

Your help is much appreciated.

Regards
Murali

Hi - there are also lots of posts on here about finding a suitable accountant - some prefer the larger type firms, others prefer local specialists (myself included). Good luck.