tax 2018

The contractor taxation calculator has been updated to the latest financial year changes which aids in the accurate calculation of the take home pay for contractors operating under their own private limited company. These changes include:

  1. The Tax Free income allowance to £11,850 which is the income you can earn before the government starts taxing you.
  2. The Tax Fee dividend allowance to £2000 which is the dividends you can take from your company as a shareholder before you start getting taxed on dividend earnings
  3. Corporation tax to 19% which is the tax you pay as company after all expenses have been deducted
  4. The tax Free national insurance contributions allowance to £8,424 which is the amount you can earn before you start contributing to National Insurance

Several other parameters have been changed such as:

Tax bands for dividends

  • Between £2000 – £36,500 you pay 7.5% dividend tax
  • Between £36,501 – £152,000 you pay 32.5% dividend tax
  • Over £152,000 you pay 38.1% dividend tax

National Insurance bands

  • Between £8,425 -£46,350 you contribute 12% to national insurance
  • Above £46,350 you contribute 2% to national insurance

Miles allowance (These are the miles you commute to your work and back home)

  • For the first 1000 miles you can write off £0.45/mile as expenses from your limited company
  • For miles above the first 1000 you can write off £0.25/mile as expenses from your limited company

If you want to calculate your take home pay and taxes as a contractor go to contractortaxation.co.uk

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