The continuing nonsense of "Take Home Pay"

[Ebenezer]

I think you're being trolled.

FWIW I have had at least one permanent job where all of the below were employer provided, and several where most of them were. This was in the "good old days" when the BIK rules weren't what they are today. In fact, why the hell am I contracting??

Oh right lol, can't account for that but my phone, life insurance, income protection, accountant, milage all adds up. About £200 a week.

Those are the exceptions though. Come on, you know I don't mean those sort of travel costs obviously. Mileage, lunch, childcare, mobile phone, etc, etc, etc. It's money you get without paying tax that you would probably (WITH OBVIOUS EXCEPTIONS) would be paying as a permie with your post-tax income.

Did I mention obvious exceptions yet?

[FK1]

£300 in a week could be accommodation costs that paid to a contractor on not "all inclusive" rate.
That should be included to invoices. Then that is Sales.

If a contractor wants and could (have receipts) it could become later as an Expense.

If it is received from a client directly to a personal bank account then it is Income.

That could look like reimbursed expenses but where it is from Client it is Sales or Income.

If it is between Ltd and its Director then it could not be Income where it is reimbursed expenses.

What is interesting
As of 6th April 2016, employers are no longer required to report reimbursed expenses on forms P11D.

I think that all about is expenses reimbursed or expenses incurred. But £300 in a week for a hotel is easy.

They are based on current tax legislation and specific regulations. HMRC has to be satisfied that the expense is allowable for tax purposes; otherwise the reimbursement is treated as additional taxable income

Hope my post is relevant

[SueEllen]

You guessed wrong.

You seem unaware that larger employers frequently insure the life of employees, insure them against sickness and a few other things. It doesn't mean the individual employee gets the money but it helps the business to meet its costs if these things happen.

[SueEllen]

Btw when did a permanent employee need an accountant to do their Corporation tax return? Or run their payroll?

[l35kee]

You seem unaware that larger employers frequently insure the life of employees, insure them against sickness and a few other things. It doesn't mean the individual employee gets the money but it helps the business to meet its costs if these things happen.

Oh I'm aware of that yes. Typically a small sum which the employee can pay more to increase the coverage of, but it of course differs depending on the employer.

In any case my comment was in regards to my income protection being bik, it isn't.

Btw when did a permanent employee need an accountant to do their Corporation tax return? Or run their payroll?

That was a mistake in my previous comment when listing expenses, thanks for highlighting it. Obviously being trolled now so I'll let this be my last comment in this thread.

Hopefully the point was clear to future readers though, especially those new to contracting who don't quite understand expenses.

[SueEllen]

Oh I'm aware of that yes. Typically a small sum which the employee can pay more to increase the coverage of, but it of course differs depending on the employer.

In any case my comment was in regards to my income protection being bik, it isn't.



That was a mistake in my previous comment when listing expenses, thanks for highlighting it. Obviously being trolled now so I'll let this be my last comment in this thread.

Hopefully the point was clear to future readers though, especially those new to contracting who don't quite understand expenses.

You aren't being trolled.

You have been taken to task because you are talking nonsense.

You may have poor permanent employers, been at a lower position when permanent or only worked in one location but others haven't, know people who haven't and also know people who have and do work in larger companies finance departments.

Btw In regards to lunch there are some jobs where employers do pay for the lunch of employees particularly senior ones. However these people tend to do 12+ hour days almost daily so get a couple of meals regularly paid by their employer.

[WordIsBond]

You guessed wrong.

OK. So this income protection is insurance that your company owns and the proceeds go to the company if there is a claim. For you to get the money out of the company, it will be income to you.

So the insurance premiums are not income to you. They protect your company, not you. Will you benefit? Yes, possibly. But if you do, THAT is when you will have income.

[l35kee]

OK. So this income protection is insurance that your company owns and the proceeds go to the company if there is a claim. For you to get the money out of the company, it will be income to you.

So the insurance premiums are not income to you. They protect your company, not you. Will you benefit? Yes, possibly. But if you do, THAT is when you will have income.

Oh man, OK this is my last comment then!

If the company didn't pay for it, I'd be paying for it out of my personal bank account that has already been taxed.

My point has nothing to do with any claims.

You aren't being trolled.

You have been taken to task because you are talking nonsense.

No, I am not. I tried to make a high level point that not all expenses should be treated as costs, and that many of them are a way of paying for things through the company that you would otherwise be paying for out of your personal account.

Your replies (and others) dispute this by giving very specific examples which are fine but not necessarily the ordinary state of affairs for many people. Such as permies getting their lunches paid for them. That may be so, but it is not the standard experiment for the majority of permies, and does not constitute proof that I am talking nonsense.

You may have poor permanent employers, been at a lower position when permanent or only worked in one location but others haven't, know people who haven't and also know people who have and do work in larger companies finance departments.

This is a great example of what I mean. This comment came after I said I don't want to be part of this bow destructive (rather than helpful) thread. You have made a few assertions about me and my experience which are designed to be derogatory. You may not have meant to, but your chosen words say it all. And to be clear, the assertions are all wrong.

Honestly, this thread should be closed now. I can't see how any further posts will add anything positive to this conversation. But hey ho. Feel free to quote any parts of this post in your next reply. I am done with this conversation. You'll find me in other threads attempting to be helpful, maybe a bit sarcastic as I try to live up to NLUKs standards.

[SueEllen]

Oh man, OK this is my last comment then!

If the company didn't pay for it, I'd be paying for it out of my personal bank account that has already been taxed.

My point has nothing to do with any claims.



No, I am not. I tried to make a high level point that not all expenses should be treated as costs, and that many of them are a way of paying for things through the company that you would otherwise be paying for out of your personal account.

Your replies (and others) dispute this by giving very specific examples which are fine but not necessarily the ordinary state of affairs for many people. Such as permies getting their lunches paid for them. That may be so, but it is not the standard experiment for the majority of permies, and does not constitute proof that I am talking nonsense.




This is a great example of what I mean. This comment came after I said I don't want to be part of this bow destructive (rather than helpful) thread. You have made a few assertions about me and my experience which are designed to be derogatory. You may not have meant to, but your chosen words say it all. And to be clear, the assertions are all wrong.

Honestly, this thread should be closed now. I can't see how any further posts will add anything positive to this conversation. But hey ho. Feel free to quote any parts of this post in your next reply. I am done with this conversation. You'll find me in other threads attempting to be helpful, maybe a bit sarcastic as I try to live up to NLUKs standards.

Running away as other posters are simply pointing out in detail what Malvolio said a few posts ago that if you are making a profit out of expenses it is tax evasion?

For any new posters expenses are not income.

Yes you now probably hold a higher position in a company than you did before hence you have more expenses, but you only have those expenses due to that position and the nature of your work. Be aware that some of those expenses you may not be able to claim continuously such as travel and meals as everything depends on your individual circumstances. This is why those calculators are wrong and probably worthless.

Btw if you pay insurance like income protection yourself, out of your personal bank account, it is all your money. If it is paid from the company you are director of, then it goes to meeting the company's running costs before any income is paid to that director.

[Ebenezer]

I have an alternative take on this which might also be of use to new contractors:

• If you have lunch at Hawksmoor every day and you're a permanent employee, you will be paying for this out of your salary.
  
• If you have lunch at Hawksmoor every day and you're a contractor, you will be paying for this out of your pension.