HSMP renewal coming up?'

I am an IT contractor and presently working through own Limited Company. I have my HSMP renewal due in six months. I want a solution which is tax efficient and at the same time should ensure that there is no uncertainty in terms of Income. Presently i take minimum salary and balance as dividend and expenses. My present net in hand return is appx 80%.

Contractor Taxation Vocabulary: 


If you're the average

If you're the average contractor running his own Limited Company I would suspect that you have set your PAYE earnings level at much lower than the £37,000 required to ensure maximum points when renewing your HSMP. The Border Agency will not take into account dividends or expenses unless full personal income tax has been paid on them. Your are left with 3 options: 1) Increase your PAYE level to £37K through your limited company, 2) Have your agency process all your income PAYE, 3) Utilise the services of a Financial Management Structure and instruct them to set your PAYE at £37,000. The latter of these options will result in the highest possible retention on your gross billing, depending on your earnings level you could retain up to 82%. Have a look here http://contractortaxation.com/?q=uk/tier-1-highly-skilled-worker-hsmp-vi... for further information or contact us.