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30th January 2009: Weekly tax calculation for Solo and CIS
For those of you working under our Solo or CIS contracts you will notice a new addition on the bottom left of your remittance advice in the coming weeks. Under the heading of Tax and NI Advice for this Payment you will see an estimate of what Tax and Class 4 NI you need to set aside for this payment (if there are multiple payments in the week then you will need to add all these together).
In the case of CIS you will also see what tax has been deducted on your behalf but there could still be additional tax to pay at the end of the year. If you are earning enough to pay higher rate tax then there will be a significant additional amount to pay. In all cases you will see how much we suggest that you put away or reserve for your year end tax return.
This will be based on a standard tax code and on a non cumulative basis. It only takes into account the money you have been paid this week through Gabem. If you have been working elsewhere during the tax year and if your cumulative income takes you into a higher tax bracket you will need to take this into account when calculating the tax you will be liable for at the end of the tax year.
The tax advice will appear on every remittance advice we send you but will be for that payment period alone. In other words it will not be cumulative representing a Year to Date figure.
We hope you find this helpful. It is intended as a weekly snap shot of your possible tax liability. For an accurate year end calculation you will need to retain each remittance advice notification for your own records and ensure you are reserving sufficient funds for your tax return.
From the beginning of the next tax year in April 2009 we will be offering an additional service. You will be able to reserve the tax you will be due on a monthly basis with a Gabem Reserve scheme ensuring that not only will you have no nasty surprises but you will also have the funds available to pay your tax bill at the end of the year. We will be sending you more details of this service nearer the time.
Have a great weekend
Steve Girdler
30/01/2009
