7/12 contract Tax implications - Any knowledge?
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Joined: Aug 2005
Posts: 149
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From: England
7/12 contract Tax implications - Any knowledge?
Just wondering if anybody out there has any experience with the seven months on five months off contracts. My wife can either have seven full payments or 12 lesser payments the whole year. Presumably the tax man will mess everything up if we take the seven full payments and tax us at the wrong higher rate. Has anyone been through this and figured out the best way to be remunerated? Thanks
Joined: Mar 2008
Posts: 829
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From: Newcastle NI
Over the course of a year if paid through the UK PAYE system it shouldn't make any difference, however getting the the full year salary in just 7 months would mean paying a higher cash amount of tax each month and when your 7 months is up the tax people won't give you the money back just like that, you have to wait at least least a couple of months and then it would only be on the YTD position just in case you start earning again!! so my advice would be get 12 smaller amount provided that your happy that your employer will still be around to pay you, depending on salary level you may also qualify for some working tax credit, but thats more likely at cabin crew level than pilot salary level.
