Why has Sunak deliberately excluded 3m from COVID support?

[CaptainSlow]

chrispmartha said:

Im not going to post my personal income details sorry, if you are bothered type in whatever figures you want i to the online calculator

I also didn’t say there isn’t much difference, i said it’s not as much as people think.

I gave you example figures, I didnt ask you to post yours.

[CaptainSlow]

Countdown said:

CaptainSlow said:

I mean a true example, base on an £80k salary.

..and £450 a day alternative.

There are some figures below which compare Contracting to Umbrella. These should give a rough idea as to the savings of PAYE vs LtdCo

https://www.itcontracting.com/calculators/limited-...

Umbrella is similar to PAYE except the Individual is allowed to claim certain expenses that a PAYE Employee couldn't.

The differences are quite sizeable...and that's ignoring putting the Mrs on the books as she does the invoicing.

[CaptainSlow]

Also to add, in regards to the online take home calculators under an umbrella scenario I've yet to find one that does the calculations correctly.

[ghost83]

As a company we haven’t had much

We supply amusement machines to pubs (fruit machines,pool tables)

We got the original £10k last March

And then when pubs closed end of October they started tier payments which we weren’t entitled to as we aren’t mandated to close despite pubs been closed!

So we applied for arg 1 or 2 grant and got £900 at the start of December then another £900 at start of February

We were refused the 4K grant in January which was meant to help suppliers as our premises is a warehouse not leisure or hospitality and we don’t pay retail rates!

We are hoping we can get the 4th and 5th grant which was announced

So ppl have said why can’t we claim the grants based on profits, long story short we took a loan with funding circle to buy 2 competitors out one loan for 150k and the other for 200k the repayments are 6k a month so what would be our profit wasn’t profit!

Our business costs £12k a month to operate with the 6k loan repayments and as you can tell we haven’t had nearly enough! So been missing payments and then a payment holiday! Both loans have accrued interest at 13% and are now more than what those businesses were worth!

It’s going to take us 5yrs to catch up to where we were as about 10-12 pubs have also gone bust so our turnover is going to be severely down!

As a partner in the business my father now wants to clear the loans and get out to which I’ve said I will buy him out in 4-5 yrs time when it’s all cleared

And it doesn’t look like it’s going to be any better anytime soon! With pubs not been able to open indoors till may 17th

This Easter holiday alone we will lose 30k as the arcades we operate are still closed

Since end of October I’ve had to live off of savings and thankfully not taken a mortgage holiday but it’s not easy

Edited by ghost83 on Sunday 7th March 18:10

[chrispmartha]

CaptainSlow said:

chrispmartha said:

Im not going to post my personal income details sorry, if you are bothered type in whatever figures you want i to the online calculator

I also didn’t say there isn’t much difference, i said it’s not as much as people think.

I gave you example figures, I didnt ask you to post yours.

So if you want the figures type them into a calculator

[CaptainSlow]

chrispmartha said:

CaptainSlow said:

chrispmartha said:

Im not going to post my personal income details sorry, if you are bothered type in whatever figures you want i to the online calculator

I also didn’t say there isn’t much difference, i said it’s not as much as people think.

I gave you example figures, I didnt ask you to post yours.

So if you want the figures type them into a calculator

I know the figures, I want you to justify why the difference isnt as large as people think. You're not going to do it though as you cant back it up.

[anonymous-user]

CaptainSlow said:

I know the figures, I want you to justify why the difference isnt as large as people think. You're not going to do it though as you cant back it up.

You have to balance the extra personal income against the company taxation.

I modelled my company figures on £100k gross profit. From memory as 3 individuals taking a combined income of £80k, we personally paid £11k less tax by taking dividends and minimal salary. The company was £4k worse off due to corporation tax on the additional profits. The net benefit (for that is what matters) was £7k. That's not massive.

[biggles330d]

768 said:

Oakey said:

If there's no benefit to taking dividends then why bother?

Because my company income isn't fixed, it varies considerably, so I take a payment only after I know what's left.

This 100%. I could take a salary much higher than I do but unlike a permanent employee of a larger company where I would get paid regardless of company performance up to the point I might get made redundant if the company is doing poorly and can no longer afford the wage bill, I'm totally exposed to the variability of the project work I secure. I may have a good year but equally i may have a very bad year. Taking a small salary and dividends give me the ability to manage my business cashflow much better. If I have a good year there's money in the business to pay myself some more, if I have a bad year then I have the choice to keep money in the company as buffer and accept I'll personally earn less.

Yes, there are upsides to it but there have been a number of years where if I'd taken a big PAYE salary my company would have become insolvent. Managing that risk is part of having a PSC and dividends is a very effective way of managing personal income in the context of variable company revenue.

[CaptainSlow]

RonaldMcDonaldAteMyCat said:

CaptainSlow said:

I know the figures, I want you to justify why the difference isnt as large as people think. You're not going to do it though as you cant back it up.

You have to balance the extra personal income against the company taxation.

I modelled my company figures on £100k gross profit. From memory as 3 individuals taking a combined income of £80k, we personally paid £11k less tax by taking dividends and minimal salary. The company was £4k worse off due to corporation tax on the additional profits. The net benefit (for that is what matters) was £7k. That's not massive.

Did you include employers ni under the paye scenario? If so what were the two tax figures so we can see how much £7k represents as a proportion.

[chrispmartha]

CaptainSlow said:

chrispmartha said:

CaptainSlow said:

chrispmartha said:

Im not going to post my personal income details sorry, if you are bothered type in whatever figures you want i to the online calculator

I also didn’t say there isn’t much difference, i said it’s not as much as people think.

I gave you example figures, I didnt ask you to post yours.

So if you want the figures type them into a calculator

I know the figures, I want you to justify why the difference isnt as large as people think. You're not going to do it though as you cant back it up.

So you’re just being chippy for the sake of it.

[CaptainSlow]

chrispmartha said:

So you’re just being chippy for the sake of it.

Nope, I just want to understand your reasoning.

[anonymous-user]

CaptainSlow said:

Did you include employers ni under the paye scenario? If so what were the two tax figures so we can see how much £7k represents as a proportion.

Yes. The NI and corp tax combined paying salaries came to £9.7k and dividends there was no NI but corp tax of £14k.

[JagLover]

NerveAgent said:

JagLover said:

So they structured their affairs to avoid paying National INSURANCE and then wonder why they didn't get a pay out

Although you can claim furlough on the small salary that is likely set just before the NI threshold...

Yes true enough

Anyone with any sense would have been paying themselves a salary at least up to the NI threshold and would have been entitled to 80% of that. So they would have received some support if unable to work, just less than those who structured their affairs differently, which seems fair enough.

[chrispmartha]

CaptainSlow said:

chrispmartha said:

So you’re just being chippy for the sake of it.

Nope, I just want to understand your reasoning.

It’s quite simple people often think taking dividends saves you a lot of money (and Ive had people think you don’t pay any tax at all) when in reality the amounts saved aren’t huge. Along with dome people not realising that more corporation tax has to be paid if you don’t take a regular salary.

Understand?

Is that OK for you?

[CaptainSlow]

chrispmartha said:

CaptainSlow said:

chrispmartha said:

So you’re just being chippy for the sake of it.

Nope, I just want to understand your reasoning.

It’s quite simple people often think taking dividends saves you a lot of money (and Ive had people think you don’t pay any tax at all) when in reality the amounts saved aren’t huge. Along with dome people not realising that more corporation tax has to be paid if you don’t take a regular salary.

Understand?

Is that OK for you?

Not really, the differences can be quite sizeable...I just wondered if you had any figures to back up your original claim but seems you don't.

[chrispmartha]

CaptainSlow said:

chrispmartha said:

CaptainSlow said:

chrispmartha said:

So you’re just being chippy for the sake of it.

Nope, I just want to understand your reasoning.

It’s quite simple people often think taking dividends saves you a lot of money (and Ive had people think you don’t pay any tax at all) when in reality the amounts saved aren’t huge. Along with dome people not realising that more corporation tax has to be paid if you don’t take a regular salary.

Understand?

Is that OK for you?

Not really, the differences can be quite sizeable...I just wondered if you had any figures to back up your original claim but seems you don't.

What figures do you want, people have provided you with them, and you say you know them anyway?

[CaptainSlow]

chrispmartha said:

What figures do you want, people have provided you with them, and you say you know them anyway?

I gave you the figures earlier....I want to see the total tax bill under each scenario that you have calculated.

[chrispmartha]

CaptainSlow said:

chrispmartha said:

What figures do you want, people have provided you with them, and you say you know them anyway?

I gave you the figures earlier....I want to see the total tax bill under each scenario that you have calculated.

If you want to see them use an online calculator.

[anonymous-user]

CaptainSlow said:

I gave you the figures earlier....I want to see the total tax bill under each scenario that you have calculated.

You've been given it.

Bear in mind my scenario is 3x employees earning £80k between them. That's 3x personal allowance a and 3 X dividend allowance.

Based on £100k company gross profit, with everything as salary it is:

Personal tax/NI paid: £14.3k (between 3 people)
Company tax paid (NI and CT): £9.7k

Total tax £24k

If taken minimising tax using dividends it's;

Personal tax paid: £2.7k
Company tax paid: £14k

Total tax £16.7k

[CaptainSlow]

RonaldMcDonaldAteMyCat said:

CaptainSlow said:

I gave you the figures earlier....I want to see the total tax bill under each scenario that you have calculated.

You've been given it.

Bear in mind my scenario is 3x employees earning £80k between them. That's 3x personal allowance a and 3 X dividend allowance.

Based on £100k company gross profit, with everything as salary it is:

Personal tax/NI paid: £14.3k (between 3 people)
Company tax paid (NI and CT): £9.7k

Total tax £24k

If taken minimising tax using dividends it's;

Personal tax paid: £2.7k
Company tax paid: £14k

Total tax £16.7k

Are you basing those numbers on ~£30k salaries for three people...so three personal allowances? This salary level isnt really representative of the salary levels of the typical contractor. Up the salary levels to something closer to reality for a disguised employee so £80k salary compared to a fee equivalent to £80k plus employers NI. When you run these calcs you'll find that the difference is sizeable. Then start putting in the travel against the Ltd, then start giving the Mrs a salary for her admin job. Up the fee levels and start giving her a pension too.