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The future, according to some scientists, will be exactly like the past - only far more expensive.
Contractor, or ‘iPro’, growth experienced across Europe

27 - 11 - 2013

The EU has experienced an increase in independent professionals, or ‘iPros’, commonly referred to as freelancers or contractors, according to the European Forum of Independent Professionals (EFIP).

The EFIP’s report ‘Future Working: The Rise of Europe’s Independent Professionals (iPros)’, which was carried out by Professor Patricia Leighton from the University of Glamorgan, found that there are now almost 9 million independent workers in Europe compared to 6.2 million in 2004.

Growth was consistent across the EU, but the Netherlands, Poland and France experienced a particularly sharp rise.
The UK saw an above average increase (63 per cent) in iPros between 2004 and 2013.

The report defined iPros as ‘highly skilled self-employed individuals who work for themselves but do not employ others’.
 
According to the report, independent professionals constitute 25 per cent of the professional, scientific and technical workforce and 22 per cent of those working in the arts and entertainment industry. Ipros can be found in a wide variety of sectors, however, ranging from journalism and design to ICT and consultancy.

‘A new and exciting radical agenda’

The research revealed that there is a major shift in the way work is being carried out – a shift from having a job to working for clients.
 
‘A new and exciting radical agenda based on collaboration rather than competition has emerged as a response to perceived failures in existing business and management strategies,’ the report reads.

The study found that iPros find the way they work fulfilling. Many who choose this route have rejected traditional employment as they feel it requires conformity and represses creativity.

The report makes a series of recommendations aimed at policy makers, professional bodies, clients of iPros and iPros themselves relating to awareness, recognition and the contribution of iPro working, finding a voice for iPros, training and development and providing support for iPros.

Recommendations include ensuring there is an emphasis on work creation in publicly funded schemes to support the creation of jobs so that iPros are not excluded or disadvantaged and recognising that iPro working is a legitimate and realistic career option and to encourage this way of working through funding.
 
Fastest growing sector’

Simon McVicker, Director of Policy and Public Affairs for the Professional Contractors Group (PCG) said: ‘This report proves conclusively that freelancing is the fastest growing sector of the European labour market.

‘The importance of recognising this important, powerful and expanding group and the huge contributions they make to economies across Europe cannot be overstated. Considering how vital this sector is becoming, it is crucial for decision-makers to take on board the recommendations from this report.

‘The way we work is changing and unless policy, legislation and business practices change with it, we risk clipping the wings of the very sector of our workforce best placed to create growth and prosperity for our collective economy.’



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WEEKLY INCOME INFORMATION

Number Of Weeks
Tax Code
Primary Hours
Primary Rate In £
Secondary Hours
Secondary Rate In £
Other Hours
Other Rate In £
Weekly Bonus In £
Total Anticipated
Income For A Week
-
Anticipated Annual
Pre Tax Income
-
NORMAL WEEKLY EXPENSES
Miles Per Week
Other Expenses Per Week
Annual Mileage
-
Mileage Expenses
-
Total Annual Expenses
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FLAT RATE VAT

Choose the Industry Sector that you work in. Use the drop down menu in the usual way.

The VAT Flat Rate Applied -

WARNINGS

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Get Alerts. The law changes!

RESULTS TABLES

COMPARISON TABLE FOR NET INCOME

BUSINESS STRUCTURE
CORPORATE
SOLE TRADERS
UMBRELLA
AGENCY
Post Tax Weekly Pay
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-
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Avarage Hourly Take Home Pay
-
-
-
-
Annual Take Home Pay
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-
-
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Plus Taxed Holiday Pay Fund Less Higher Rate Dividend Tax
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-
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Annual Take Home Pay
-
-
-
-

RELATIVE INCOME BY STRUCTURE

BUSINESS STRUCTURE
CORPORATE
SOLE TRADERS
UMBRELLA
AGENCY
Measured against PSC
Measured against PSC
Measured against PSC
Worse off
Weekly by :-
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-
-
-
Worse Off
Annually by :-
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-
-
-
Measured against AGENCY
Measured against AGENCY
Measured against AGENCY
Worse off
Weekly by :-
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-
-
-
Worse Off
Annually by :-
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-
-
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Fixed Data

PAYE

Tax Code L between 0 and 999.
0
Tax Rate
Personal Allowance
£11500.00
0.00%
Lower
£0.00
0.00%
Basic up to
£33500.00
20.00%
Higher above
£33501.00
40.00%

Statutory rates

National Minimum Wage
£7.50
Holiday Pay
10.77%
Mileage Rates
Per Mile
Up to 10,000 miles
£0.45
10,000 miles
£0.25

CIS

Rate
Percentage
Gross
0.00%
Standard
20.00%
Higher
30.00%

Corporation tax

Small Company Tax Rate
19.00%

National insurance

Primary Threshold
£8164.00
Secondary Threshold
£8164.00
Employers NI between PT and UEL
13.80%
Employees NI above UEL
12.00%
Employees NI
2.00%
Class 4 NI between LPL and UPL
9.00%
Class 4 NI above UPL
2.00%
Class 2 NI
£2.85
Annual LEL
£5880.00
Annual UEL / class 4 upper profits
£45000.00
Class 4 Annual lower profits limit
£8164.00
Weekly PT
£157.00
Weekly LEL
£113.00
Weekly UEL
£866.00

UMBRELLA COMPANY

Holiday pay accrual
 
Is Holiday Pay being accrued?
Yes

AGENCY INFORMATION

Agency Uplift Applied
10.00%

Assumptions



General                                                                                                                              

  • The user is over 21 and subject to tax in the UK
  • The user wishes to minimise their tax liability
  • The user is subject to national insurance i.e.he/she is not over retirement age
  • Only current tax rates and limits are applied
  • No tax mitigation payments are made e.g. pension contributions
  • Only 3 digit letter 'L' tax codes shown in the drop down list can be entered 
  • The user does not have a turnover greater than £100,000 where fewer reliefs and or higher taxes may apply

Expenses

  • All miles claimed as expenses are for business use using a personally owned car or van
  • All other expenses claimed are wholly, necessarily and where appropriate exclusively for the benefit of the business

Foremans LLP Charges

  • Foremans fees associated with Limited Company, Sole Trader or Umbrella are as per published rates
  • Foremans current Service Costs are allowed for in all calculations.

Holiday Pay

  • Holiday pay is accumulated week by week by Umbrella or Agency employer but paid out during the year

VAT

  • Limited Company or Sole Trader will be VAT registered
  • Limited Company or Sole Trader will take advantage of Flat rate VAT
  • Flat rate applied includes the benefit of the additional 1% applicable to the first year of VAT registration

Limited Company Conditions

  • One director / one shareholder in a Personal Service Company
  • Director of Personal Service Company elects to vote for 100% dividend after salary, costs and expenses
  • Director's salary is maximum salary to the primary threshold for NI
  • The Limited Company is trading normally i.e it is not subject to IR35 and is not a Managed Service Company

NOTES

  • The Current tax rates are taken from the Fixed Data Table
  • The current Value Added Tax Rate is 20% and is applied to all invoices and expenses as appropriate
  • The Director's Salary is fixed in relation to National Insurance thresholds. Higher Rate Taxpayers should consider the advantages and disadvantages of a larger annual salary or bonus
  • Higher Rate Taxpayers may wish to consider the advantages and disadvantages of shared ownership of their business
  • Users with a tax code other than three digits and letter "L" may telephone or email our Development Department to request a detailed calculation
  • Generally the use of an Umbrella rather than an Agency payroll is only efficient if sufficient weekly expenses are allowable and claimed
  • The expenses claimed under an Umbrella should not prevent the proper operation of National Minimum Wage
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Foremans LLP
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