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Take a 45% cut post tax for a perm job to just about pay off the bills or wait?

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    #61
    Originally posted by hugebrain View Post
    Abroad, and it was a shade over 100 for 13 months.

    You contractors are obsessed with tax.
    Oh, the Monaco scheme.

    Comment


      #62
      Originally posted by dsc View Post
      I'll bite and ask, how? Assuming you work 250 days a year which imho is still plenty that is still only 250k pre corp tax, living costs etc. and that is still owed by the company, so additional tax to pay if you want to get it out. 5 years is probably more realistic and still assuming you live like a hermit and that you have no breaks in-between contracts.
      I guess you have to take it in the context of the weirdos eating frozen pizza and ramen noodles. The two hundred and fifty in the company could be taken out gradually. You could do one of those entrepreneur closing down scams. If you have kids you could do the tax credit scam and pay little or no tax (maybe negative) and still live well for a decade or two. I don't know, you guys are the ones obsessed with tax.

      I might be out by a couple of months, but the principle stands. When there were contracts to be had it was relatively easy to store up a bit of cash just by googling for code and cutting and pasting it into your chosen IDE.

      This is assuming you do have breaks in between contracts, otherwise you don't need to save in the first place.

      Comment


        #63
        Originally posted by hugebrain View Post
        I guess you have to take it in the context of the weirdos eating frozen pizza and ramen noodles. The two hundred and fifty in the company could be taken out gradually. You could do one of those entrepreneur closing down scams. If you have kids you could do the tax credit scam and pay little or no tax (maybe negative) and still live well for a decade or two. I don't know, you guys are the ones obsessed with tax.

        I might be out by a couple of months, but the principle stands. When there were contracts to be had it was relatively easy to store up a bit of cash just by googling for code and cutting and pasting it into your chosen IDE.

        This is assuming you do have breaks in between contracts, otherwise you don't need to save in the first place.
        I don't understand... so did you save 200k in your personal bank account in 13 months at 800 per day or not? Was that just a hypothetical?

        Comment


          #64
          Originally posted by ziggystardust View Post
          If anyone is considering a break after finishing a contract recently and is wondering what the market is like, well it's bad. Really bad. Having been on the bench late last year, then started a new gig briefly to then be diagnosed with a serious illness that laid me off work from March to June (yes just before COVID lockdown hit), my options have pretty much dwindled.

          Living off the warchest, I thought I would bounce back within a month with a shiny new contract but nope. With less than 2 months buffer I have been furiously applying for perm jobs and even temporary jobs, as the market is just that tulip for contracting. Didn't ever think this would be how I'd be looking for work but it's with the prospect of losing the roof over my head it had to be done. So two interviews lined up for perm jobs next week, 45% less money than my usual day rate after tax etc. , with small, public sector organisation, completely different to the blue chip companies I've worked for over the last 10 years. Junior salary really.

          Hate the thought of taking either one because of the possible message it sends to potential recruiters in the future and my skillset? Basically going backwards job wise and moneywise and think I've damaged my ability to earn my worth again. Would you do it or hold out to the bitter end?

          This will also mean folding the company as after tax and VAT payments it's not worth keeping it running. With IR35 looming next March, I think my contracting days could sadly be over!
          In your place I would do what you are doing, probably with similar misgivings. However:

          - Regards taking a lower paid permie job in dire need - well done.

          - Regards "possible message it sends to potential recruiters", well if I was a recruiter, it would tell me you are a straight up guy who can make a sacrifice when the chips are down, and that you are flexible and can adapt to big changes.

          - Regards the affect on your skill set, the impact is likely to be positive. You will be included in all the company training.

          - There are social advantages to both permanent work and working for a smaller company. Try to enjoy them.

          - Get used to your role as one of the most capable employees.

          Comment


            #65
            Originally posted by jayn200 View Post
            I don't understand... so did you save 200k in your personal bank account in 13 months at 800 per day or not? Was that just a hypothetical?
            Just 150,000. I wasn’t trying to save though, so hypothetically I thought one could save 200,000 through scrimping a bit and doing some overtime.

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              #66
              Update: Surprisingly or not I did not get either job. The line of questioning in one interview implied that I was over qualified for the job and in the other that my sector experience wasn't the right fit.

              I have now been offered a 3 month temp job directly through an agency paying £12 an hour on their payroll, which I'm taking. I would still need to supplement that with additional cash as it wouldn't be enough to cover my monthly outgoings. If I close the company, after paying off the accountant I will come away with £4500. The other option is I keep the company open and take it as dividends to supplement my income over the next 3 months in the hope of finding another contract or permanent job in that time. What are the tax implications doing this?
              Last edited by ziggystardust; 19 September 2020, 08:09.

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                #67
                This thread is a real eye opener to me. Contractors having to take £12/hr temp jobs or live on the streets. Scary times.
                First Law of Contracting: Only the strong survive

                Comment


                  #68
                  You would need to declare the £12 ph job on your SATR just like you would have done for any PAYE from your LtdCo. If you haven't closed your LtdCo PAYE scheme and issued yourself a P45 your new job will be taxed at emergency rate which may result in you overpaying. Although at such a low rate the impact is likely to be minimal.

                  I do hope things pick up for you. Keep at it!

                  Comment


                    #69
                    Originally posted by ladymuck View Post
                    You would need to declare the £12 ph job on your SATR just like you would have done for any PAYE from your LtdCo. If you haven't closed your LtdCo PAYE scheme and issued yourself a P45 your new job will be taxed at emergency rate which may result in you overpaying. Although at such a low rate the impact is likely to be minimal.

                    I do hope things pick up for you. Keep at it!
                    I'm keeping at it alright I issued myself a P45 a couple of weeks ago but does that incorporate closing the PAYE scheme or is leaving it open detrimental in some way? My accountant also mentioned that I would also get taxed an additional 7.5% on top of tax on any dividends I continue to take out if I keep the company open whilst temping. Is that right?

                    Comment


                      #70
                      Originally posted by ziggystardust View Post
                      Update: Surprisingly or not I did not get either job. The line of questioning in one interview implied that I was over qualified for the job and in the other that my sector experience wasn't the right fit.

                      I have now been offered a 3 month temp job directly through an agency paying £12 an hour on their payroll, which I'm taking. I would still need to supplement that with additional cash as it wouldn't be enough to cover my monthly outgoings. If I close the company, after paying off the accountant I will come away with £4500. The other option is I keep the company open and take it as dividends to supplement my income over the next 3 months in the hope of finding another contract or permanent job in that time. What are the tax implications doing this?
                      Keep company open, get a bounce back loan, draw down as salary until you are able to find another contract (or run out of money)

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