I'm a new UK contractor, and I've just had my first payment and was wondering how much I should put aside and how I go about actually transferring the cash from my business account to my account.
I've a limited company set up, it's just me in the company, and I'm VAT registered. I've just got my first payment from my contracting job and because I'm really poor at the moment I'd like to transfer some money over to my personal account (NB I do have an accountant but really need to work this out now). I've heard people say I should save anything between 25% and 33% of what I earn for tax, and I've decided to play it save and go for the higher figure, but is this after I've deducted VAT or is that a total figure for VAT and other taxes?
So say I'd earned £1000 this month with the VAT at 20% I'd received £1200. Do I save (£1200/3) £400 or deal with VAT separately and put ((£1000/3) + VAT) £533 aside?
I'm probably going to be earning in the higher tax bracket, so should that affect how much I save now?
After I work out how much to put in to my business savings account, can I then transfer the rest over to my personal account? Should I leave some in my business account? (I tend to buy business things from my personal account and then put the receipts in a folder and record what I spend on the business to send to my accountant - I've not yet done this, so I don't really know why I'm doing this but my accountant told me to)