Switch to increased day rate within PS IR35 or leave? Switch to increased day rate within PS IR35 or leave? - Page 4
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  1. #31

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    According to the brolly calculators i have seen , you are looking at a whopping 42% tax for a PS contract inside IR35

  2. #32

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    Quote Originally Posted by Andy2 View Post
    According to the brolly calculators i have seen , you are looking at a whopping 42% tax for a PS contract inside IR35
    Well yeah, once you're past 43k pa you're on higher rate tax.

    Under a fixed term contract, you'd get 65% of 100k:

    Income Tax (PAYE) £29,200 29%
    National Insurance (N.I) £5,333 5%
    Total taxes £34,533 35%
    NET INCOME £65,466 65%

    Under an umbrella (CU in this case), you'd get 58% of your gross:

    Employment Taxes £11,418 11%
    Employee's NI £5,275 5%
    Employee Tax £23,789 24%
    Total All Tax £40,482 40%
    CU Margin £1,302 1%
    Total Net Income £58,220 58%

    I've no idea how prevalent FTCs could become in the Public Sector but they could become an alternative and allow PSBs to recruit via FTC or outside IR35 on a case by case basis. I feel sorry for them because they've been swamped by a monster that they've never had to care about before.
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  3. #33

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    If they're only umbrella for a couple of months though...? Might still be able to remain a regular rate tax payer.

    Anyhow if it's a non-starter no problem. Unless they'll pay even more...
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  4. #34

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    Quote Originally Posted by LondonManc View Post
    Well yeah, once you're past 43k pa you're on higher rate tax.

    .
    how does this work for a 6 months contract. Do you get taxed on basic rate only ? what if there is another 6 months extension then do they deduct higher taxes for next 6 months ?

  5. #35

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    Quote Originally Posted by Andy2 View Post
    how does this work for a 6 months contract. Do you get taxed on basic rate only ? what if there is another 6 months extension then do they deduct higher taxes for next 6 months ?
    It's like the good old days of permiedom where, if you're benched for the next six months, you'll get a tax rebate at some point...
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  6. #36

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    Quote Originally Posted by LondonManc View Post
    It's like the good old days of permiedom where, if you're benched for the next six months, you'll get a tax rebate at some point...
    There may be tax rebate but i don't think they will pay back both NIs

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