Contractor calculator

UK Contractors use a Contractor Calculator to reduce tax and increase profits.



High earners in the UK such as UK contractors have been taxed quite heavily by the HMRC, and this is precisely why they turn to using a contractor calculator.



Here's the thing, using a contractor calculator helps you to reduce your costs by paying less tax, which means you earn more take home profit.



So what is a Contractor Calculator?



The savvy contractors use contractors calculators primarily because the contractor calculator helps them to check how much tax they can save on a certain contractor tax solution, usually these calculators are provided by either offshore or onshore tax avoidance systems.





What information is provided by a Contractor Calculator?





The Contractor Calculator will give you info such as an illustration based upon the contractors daily pay rate in most cases a contractor who uses the calculator needs to enter their email address and then click on a authorization link in order to receive a customized report of the projected savings, as well as an overview of how the relevant tax solution works



Usually a contractor calculator will give you a minimum of this basic information:



 A personalised illustration or report on just how much a contractor can save on their contractor tax solution.

 an summary of the tax solution including faq and just how the system works.



These tax avoidance systems are legal in the sense that although the HMRC prefers you did not pay less tax, they can't do much about it because these tax solutions in many cases are carefully designed to take advantage of maximum tax leveraging provided through trusts and other mechanisms.



Where do contractors find Contractors Calculators?



contractors usually find these contractor calculators using a search online, in google, there's also a few on facebook and even a iphone app which i managed to come across.



The one which I use and recommend will be the contractor calculator online contractor tax solutions.



contractor calculators are usually a simple email form, in order for a contractor to discover just how much tax they could save they have to put in their name, a valid email address and also their daily pay rate... in this example you also get a box where one can ask any questions you've, which will be answered by the staff who work out your personal report(one would hope)



Why Do Contractors Use a Contractor Calculator?



 Contractors uses a contract calculator for any variety of reasons, to the best of my knowledge this is probably because they can make massive savings on their tax bill, say for example a contractor can come home with 87% of his contract value by using some of these contractor tax reducing services - therefore it would be mostly a purely logical profit motive.

 Secondly a lot of UK IT contractors feel (possibly justified) that they are penalised for being high earners, as in the UK they are susceptible to some of the worst/highest taxes in the world- these are individuals who have spend a massive amount of money and time to perfect their field of expertise and earn well - only to have a huge amount of this swallowed in what they feel is unfair tax levels that penalise high earners. The HMRC has in the last few years even introduced ever new measures to try force contractors to pay more tax - eg: the IR35 law which most contractors feel is actually unfair. In this situation contractors get treated and forced to pay taxes just like a normal employee. with no benefit of permanent employment.. in other words they are contractors, contracts end at a moment, and they have NO employment - this is why contractors get paid more, along comes the HMRC and they legislate a law forcing contractors operating limited companies and working for 1 client - to now pay PAYE amounts of taxes.(This is financial suicide for most contractors)

 Using the systems supplied by the operators of the contractor calculator, contractors can often avoid IR35 entirely particularly if the operators are using a Self Employed model and a trust, as IR35 applied simply to limited companies.

 Most operators of a contractor calculator also do tax statements for contractors removing a significant administrative burden from the contractors life.



Who a contractor calculator benefit most:



Who's it for?



 not risk averse

 earning about 250 per day minimum (average contractor is about 400 sterling a day)



Mostly the calculator is only going to benefit contractors who're not totally risk averse, as there is always a chance the HMRC could make a new law (and it has in the past made laws and then gone after 'back taxes owed in arrears' in this way saying 'hey you were about this tax avoidance system, now you owe us for the 5 years you were on it chum' - and they have taken several contractors to court just like this, - nonetheless they have been losing most of these cases.)



a contractor calculator benefits both contractors who choose to make use of the operators service not to mention the operators, who often charge fees varying between 9 -15% from the gross billing from the end client.