Quote:
Originally Posted by Steve2309
Wow! So they'd have to pay me £130K per year so I could have the £50K as salary? They actually want to pay me £30k per year so they'd need to pay my limited company £78K correct? Ouch! This is definitely not going to work.  |
Not quite. As I said, it's a rule of thumb. A starting point. Now, if you go ltd. as a contractor, you'll want to maximise your income - and that means minimising your Employer NI contributions. And to do that you want an non-IR35 caught contract.
So you should not expect to be paid when on holiday, or sick.
If you say £300 a day, then taking into account 6 weeks of holiday+sick+public holiday, that 48 x 5 x 300 = £72000. But that's based on a professional working day. Maybe you'll only be working a 7.5 hours day. Then you'd look at £30 an hour = £225 a day = £54000 a year.
You may be prepared to take less than this, considering that you've a non-IR35 contract, can offset some expenses, and you're guaranteed work for a year.
You really need to explain to them the costs of employment, then go for a figure where you get more than you'd get as an employee, and they pay less than they'd pay for an employee. To do
that you have to quantify the costs of employing you.
You're already saving them ERNIC, administrative costs, and certain legal employment obligations. You'll have no employment rights - and these can be very expensive for a company - so you should seek compensation for that as well.