Tax - how much of your gross do you pay?

coolsurfer · 17 May 2016 at 15:07

Hi folks, this isn't a bragging thread but wanted to have a discussion about what would be a fair % of tax on your earnings/other income.

As a freelance pharmacist My accountant has set my affairs as a limited company such that I earn £670/month salary on which I pay no income tax or NI. The rest of my income comes from dividends. THe company pays 20% corporation tax and then there's some more dividend tax depending on how much I withdraw as dividends during a particular financial year. I will actually gain state pension stamp despite paying no NI.

I have estimated that because of the way my affairs are set up I actually pay just 12-15% of my gross earnings as tax. If I was salaried for the same income instead I would be paying more like 35%.

Is this fair enough on the basis corporations like Google, Amazon, Starbucks, Facebook get away with low single digit percent tax?

Nitefly · 17 May 2016 at 15:10

Oh Lordy you just unleashed the fury!

bloodiedathame · 17 May 2016 at 15:12

Seal up your letterbox.

pepsilol · 17 May 2016 at 15:13

Lucky, I earn £600 P/M

This is a whole can of worms being opened though with your OP.

tom_e · 17 May 2016 at 15:13

Cool look how little tax I pay story bro.

android-fan · 17 May 2016 at 15:14

My brother is a locum pharmacist as well, with similar arrangements.

As a permanent employee probably pay around 34 to 40 percent, never worked out exactly. As a software developer I have the potential to go contracting, but prefer the permanent lifestyle.

TheBrooder · 17 May 2016 at 15:16

coolsurfer said:
As a freelance pharmacist

Is that like a drug dealer?

Cleisthenes · 17 May 2016 at 15:16

Worst look how much I earn thread ever

Six6siX · 17 May 2016 at 15:16

As much as it annoys me, I can't hate the players.

cheesyboy · 17 May 2016 at 15:20

Subtle £200k salary thread is subtle.

Cosimo · 17 May 2016 at 15:20

My tax inspector will enjoy reading this.

wez130 · 17 May 2016 at 15:22

I pay my way and pay the correct amount of PAYE and NI in accordance to my salary.

I have a clean conscience.

robfosters · 17 May 2016 at 15:22

No, you're a Tax fiddler. I'm phoning HMRC. And wtf is a freelance pharmacist anyway?

Craig321 · 17 May 2016 at 15:23

What you've explained is common for directors etc. nothing new.

cheesyboy · 17 May 2016 at 15:24

robfosters said:
No, you're a Tax fiddler. I'm phoning HMRC. And wtf is a freelance pharmacist anyway?

Sirrel Squirrel · 17 May 2016 at 15:25

Pretty much anyone who is self employed will be set up this way.

Jono · 17 May 2016 at 15:38

I pay too much.

dowie · 17 May 2016 at 15:40

coolsurfer said:
Is this fair enough on the basis corporations like Google, Amazon, Starbucks, Facebook get away with low single digit percent tax?

depends... if you're genuinely a freelance person who hops about to different employers essentially running your own pharmacy consultancy then fine

but if you're, like some IT guys, basically at the same place for potentially a few years then you're really more like an employee and ought to be taxed as one

breadturbo · 17 May 2016 at 15:40

Nothing

until April

peterwalkley · 17 May 2016 at 15:41

How are you getting round IR35 ? Those rules were introduced to stop people taking the mick when it came to salary vs dividend income.

EDIT: And you are taking the mick.