The IT industry is a great place to be for contractors and the need for skilled freelancers is soaring. The demand for skilled, experienced IT consultants is high so it can be expected that contracts are pouring in. Whether you are just starting out or have been working as a freelancer for some time, there is no better time than now to become your own boss and earn a great living.
You can gain many advantages from being self-employed including tax efficiency, flexibility and higher take home pay. You can challenge yourself on a professional level and expand your skills but as work starts building up and the business grows, it is vital that you ensure all the finances remain above board.
It is easy to become confused with so many different numbers being quoted to you in terms of Dividend Tax and Take Home Pay. But it is important that you stay on top of your paperwork and affairs and here Nixon Williams can help.
As an expert accountancy service, we can manage all your books properly so as the contracts keep rolling in and time becomes precious, we can take care of your accounts for you.
We at Nixon Williams have developed our own calculators to help Contractors/Freelancers to get a better understanding. The calculators available for use are:
As our clients work through limited companies and obtain their salary via dividends, we have developed a Dividend Tax calculator showcase its tax efficiency. This easy to use calculator simply requests your salary, bank interest and any dividends you have already received. Once you have input your details the total gross income is displayed below.
Since the introduction of the IR35, the importance of finding whether you are caught or exempt by the regulations has never been so important. Before getting your contract professionally analysed, we have developed a Questionnaire that asks 10 simple questions which will give you ease of mind when understanding your status.
We can recommend an independent specialist in determining whether your contact is affected by the IR35 legislation.
All of our calculators can be found on our Nixon Williams: Tax Calculator app, which is available for both iPhone/Android phones. Click here to go to our app page and download today!
Print resultsShow detailed breakdown
|Outside IR35 Year 1||Outside IR35 Year 2||Inside IR35 Year 1||Umbrella|
|Annual Income @ £1000 per day|
|Add Flat Rate VAT Saving|
|Mileage @ 20 miles per day|
|Home office @ £4 per week|
|Pension contributions @ £1073.33 per month|
|Other expenses @ £11 per day|
|Post Tax Profit|
|Dividends declared (net)|
|Profit Retained in the company|
|Personal Income Details|
|Less - PAYE on Salary|
|Less - NIC on salary|
|Less - Tax on Dividends|
|Total Income After All Taxes|
|Monthly Take home pay|
|Take home pay as % of annual income|
- Uses tax rates and allowances for 2014/15
- Assumes all contracts are OUTSIDE IR35
- Assumes no others sources of income for the contractor and spouse's other income taxed fully at source
- Based on income/expenses as detailed
- The Higher Rate taxes will be LOWER if you work fewer weeks, increase expenses, pay more into your pension or your rate falls.
- The Higher Rate taxes will be HIGHER if you work more weeks, reduce expenses, pay less into your pension or your rate increases.
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