Query on Gross income for contractors

[sanagas]

Hello Seniors/ Experts,

I am on Tier 1 (general) visa, my visa extension is due in Oct-2012. Currently i am on a contract job and my payroll is taken care by a umbrella company.

If i do calculation on 12 month basis (hourly rate 22 £/hr), i will be meeting meeting the criteria (40K) for visa extension.

MY Question: For the last 4 months i had claimed expenses (house rent) for tax benefit. Will it be wise to continue submitting expenses to get good net pay.

Can this (house rent and daily allowance) be component of gross salary. The guideline talks about re-imbursements as not being part of gross income.

Please guide me on this, i will take a decision accordingly.

Thank you in anticipation

Srikanth

[sanagas]

[quote="sanagas"]Hello Seniors/ Experts,

Have i not made myself clear with my Query..please let me know

[sanagas]

Total Hours Worked 150.00 Hour 187.50 Hour 150.00 Hour 180.00 Hour

Gross Amount £3,300.00 £4,125.00 £3,300.00 £3,960.00 £14,685.00

Holiday Paid £0.00 £0.00 £0.00 £0.00 £0.00

Pre-Processing Deductions
Holiday Fund £0.00 £0.00 £0.00 £0.00 £0.00

360 Charge (£110.00) (£120.00) (£120.00) (£120.00) (£470.00)

Same Day Service Fee £0.00
Pension Contribution £0.00 £0.00 £0.00 £0.00 £0.00

Child Care Voucher Contribution £0.00 £0.00 £0.00 £0.00 £0.00

Cycle Scheme Contribution £0.00 £0.00 £0.00 £0.00 £0.00

Expenses (£1,230.00) (£1,300.00) (£1,230.00) (£2,236.00) (£5,996.00)

Employers NI (£166.25) (£256.60) (£165.04) (£123.08) (£710.97)

Gross Pay For Tax £1,793.75 £2,448.40 £1,784.96 £1,480.92 £7,508.03

Payroll Deductions

Child Support £0.00 £0.00 £0.00 £0.00 £0.00

Court Order £0.00 £0.00 £0.00 £0.00 £0.00

Student Loan £0.00 £0.00 £0.00 £0.00 £0.00

Other Deductions £0.00 £0.00 £0.00 £0.00 £0.00

SSP, SMP, SPP £0.00 £0.00 £0.00 £0.00 £0.00

Tax (£234.00) (£365.00) (£232.40) (£171.60) (£1,003.00)

Employees NI (£142.80) (£221.52) (£141.84) (£105.36) (£611.52)

Total Deductions (£376.80) (£586.52) (£374.24) (£276.96) (£1,614.52)

Net Pay £1,416.95 £1,861.88 £1,410.72 £1,203.96 £5,893.51

Expenses £1,230.00 £1,300.00 £1,230.00 £2,236.00 £5,996.00

Reclaimable (agency) Expenses £0.00 £0.00 £0.00 £0.00 £0.00
Total Payable £2,646.95 £3,161.88 £2,640.72 £3,439.96 £11,889.51

[sanagas]

The expenses i had submitted are not re-imbursements (house rent).

My question: Can i show gross amount as previous earning or is it Gross amount for Tax.

Sorry to annoy you guys with the figures above.

I would need 25 points (with 40K earnings). With the current contract job, i will exactly earn 40K. i don't want to take risk with this expenses/ earnings ambiguity.

Please guide me

[theroyale]

My question: Can i show gross amount as previous earning or is it Gross amount for Tax.

Yes. Previous Earnings is the Gross Amount earned. As long as your umbrella company's payslips state a Gross Amount that's what is taken into consideration.[/quote]

[sanagas]

@THEROYALE

Thanks for your reply. I do understand Gross salary bit.

The expenses i had submitted doesn't reflect on my payslip and hence my actual gross is deduced considering expenses.

[QuickSam]

Taxable salary can only be claimed as income. You can't claim expenses as a part of your salary because you don't pay tax on expenses. That is the reason using umbrella company solutions before extension is not a good idea.

** Personal Suggestion: In case you are you are not meeting the required points criteria using the salary alone, switch to your own limited company and run your payroll normally without expenses. You still have 6 months.

[sanagas]

Thanks SAM, i will do the same.