Contractors Face 47% Tax Rise with New Income Shifting Proposal Thursday 6 December 2007 PDF Print Contractor Calculator, the largest independent website specialising in the contacting industry with 80,000 viewers, has calculated that the tax bill for contractors could rise as much as 47% when the new income shifting proposals from the Treasury are passed into law. A customised calculator for small businesses to determine income loss due to this measure will be available shortly on our website. Our expert, Dave Chaplin, provides the following example: Nina and Charlie are spouses, and Nina plays the 'major role' in the business as defined by the Treasury. They both pay themselves a salary of £6k net per annum, to take advantage of their tax allowances. Their gross revenue is £87,244. Their expenses are salaries (£12K) and employers NI (£244) on salaries. They have no other expenses and make a profit before taxes of £75,000. Based on the breakdown below, their taxes rise 47% based on the Treasury's income shifting model. Dave Chaplin comments: 'the measure will be impossible to apply in practice, as it calls for the valuation of each partner's contribution. There is no exact accounting technique for this purpose. Worse, it is difficult to see how the UK can maintain its flexible workforce if contractors are made to suffer in this way. Most other countries allow husband and wife to divide up income in this way. It's a way to encourage the survival of small business. The Government does not seem to consider our survival important.' For more expert comment on this issue, please contact Dave Chaplin on 0871 218 5152 or at firstname.lastname@example.org. Please cite our website if you make use of these statistics or if you use our calculator for published material. About www.ContractorCalculator.co.uk Privately owned and run by a team of existing and former contractors, the ContractorCalculator network is the most popular independent internet resource for UK contractors. Its range of calculators for contractors and permanent employees can be used for a variety of tasks from calculating taxes and net pay through to comparing contract rates and effects of IR35. In addition to the calculators it contains the most extensive knowledge base of information for first time and existing contractors. Thanks to the site’s specially tailored content and services, traffic volumes have grown every year since, and this trend is continuing. Currently each month the site receives 80,000 unique visitors and serves over 500,000 pages. The network of links with other related sites and the unrivalled exposure in the search engines means that the site continually attracts new visitors. There is an extremely healthy balance of unique and returning visitors thanks to Contractor Calculator’s exclusive combination of impartial calculators and authoritative content. No other independent site can match its ‘one-stop-shop’ proposition. This press release was distributed by ResponseSource Press Release Wire on behalf of Byte-Vision Ltd in the following categories: Personal Finance, Business & Finance, for more information visit http://pressreleasewire.responsesource.com/about.