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    • JamesFuller
    • By JamesFuller 5th Feb 18, 9:16 PM
    • 71Posts
    • 55Thanks
    Projected income based on these numbers?
    • #1
    • 5th Feb 18, 9:16 PM
    Projected income based on these numbers? 5th Feb 18 at 9:16 PM
    Hi there,

    I have been offered a contract where it will be paying me:
    • 390 a day
    • Outside IR35
    • 6 Month contract - around 140 working days
    • Estimated expenses for me monthly are 900 (that will be coming out of my LTD company) a month taking everything into account

    I am working through a LTD company and VAT registered for the first year.

    Can anyone please help me give a projection of what I could earn after all taxes etc?

    I can then use your arithmetic to do it myself in the future.
Page 1
    • 00ec25
    • By 00ec25 5th Feb 18, 10:46 PM
    • 6,382 Posts
    • 5,892 Thanks
    • #2
    • 5th Feb 18, 10:46 PM
    • #2
    • 5th Feb 18, 10:46 PM
    so who is going to do the accounts for your limited company? If you, then you need to know a lot more than just how to do sums (and on 390 per day how come you can't do sums anyway?)

    you have not stated if it is 390 incl VAT or ex VAT, however I will assume your client is a business in which case the "norm" is prices for B2B should be ex VAT

    sales income : 390 x 140 = 54,600
    vat on sales 390 x20% x 140 = 10,920
    Gross sales invoiced to client 65,520

    you do not state what the expenses relate to and therefore how much, if any, VAT is recoverable on them. lets assume (somewhat unrealistically) all your expenses have VAT on them so

    total expenses: 900 per mth x 6 months = 5,400 gross
    VAT included in 900 = 900/120 x 20 = 150
    net cost therefore 900 - 150 = 750 x 6 months = 4,500

    cashflow: VAT payable to HMRC 10,920 - (5400-4500) = 10,020
    cash left in bank after expenses and VAT: 65,520 - 5,400 - 10,020 = 50,100

    taxable profits: 54,600 - 4500 = 50,100
    corp tax 19% = 9,519
    post tax profits = 40,581

    the above obviously does not cover how you take the money out of the company and what tax you will pay when doing so since you have not mentioned how you plan to do that: salary? dividends?

    The above maths is in no way, shape, or form how the numbers should be presented to HMRC or in your statutory accounts. GO SEE AN ACCOUNTANT !
    Last edited by 00ec25; 07-02-2018 at 7:26 PM.
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