Your opinions please

**Cowboy Bob** · 19 December 2006, 08:16

That's a pointer towards IR35 (Mutuality of Obligation) whereas leaving if there is no work is a pointer against IR35. You could always shop them for that if you feel that strongly - which to be honest, seeing as its public sector and my money they're squandering, I'd be tempted.

**bobhope** · 19 December 2006, 08:37

Originally posted by Cowboy Bob

That's a pointer towards IR35 (Mutuality of Obligation) whereas leaving if there is no work is a pointer against IR35. You could always shop them for that if you feel that strongly - which to be honest, seeing as its public sector and my money they're squandering, I'd be tempted.

I wouldn't necessarily go rushing to do that. Quite often, these warm bodies will be part of somebody's little empire and if you attempt to dismantle it, you won't be the most popular person.

**masplin** · 19 December 2006, 08:45

Act of complete desperation

Sorry to jump into this thread but I am new to this and despite registering cannot see anywhere to create a new thread? I have been made redundant from my permie role and being offered an alternative contracting role. I have never contracted and just looking for some guidence as to what a £50k annual salry roughly equates to in terms of daily rate? I have done the calculation to take into account various perks, but know there is an unwritten contracting premium.

Any help gratefully received (even if telling me how to take this and start a new thread!!!!)

Apologise for messing with the system

Mike

**Cowboy Bob** · 19 December 2006, 09:16

Originally posted by masplin

Sorry to jump into this thread but I am new to this and despite registering cannot see anywhere to create a new thread? I have been made redundant from my permie role and being offered an alternative contracting role. I have never contracted and just looking for some guidence as to what a £50k annual salry roughly equates to in terms of daily rate? I have done the calculation to take into account various perks, but know there is an unwritten contracting premium.

Any help gratefully received (even if telling me how to take this and start a new thread!!!!)

Apologise for messing with the system

Mike

If the contract is in the same company then you're screwed. You will fall foul of IR35 (so you're kind of on topic by accident) which means you will pay the full employers contributions on top of your existing employees contributions. You need to factor that into your calculations.

Apart from that, read the stickies at the top of the board and the "First Timers" guide over there ---->

**masplin** · 19 December 2006, 09:36

It's actually a completely different role

I am pretty confident I will be outside IR35 as only doing it parttime as well. I have heard contractor rates being 2-2.5 times the permie salary, but no idea if that is true and even if it was depends on how you adjust salary to a daily rate.

Tks Mike

**DaveB** · 19 December 2006, 09:41

Originally posted by masplin

I am pretty confident I will be outside IR35 as only doing it parttime as well. I have heard contractor rates being 2-2.5 times the permie salary, but no idea if that is true and even if it was depends on how you adjust salary to a daily rate.

Tks Mike

Makes no difference. If you are performing the same role for the same company, part time or otherwise, then you will be caught by IR35. This is exactly the situation IR35 was intended for to begin with, before HMRC decided to try and widen the application.

**tim123** · 19 December 2006, 10:29

Frankly, ISTM that inside or outside IR35 is irrelevent.

The guy's choice seem to be: accept a job inside IR35 or be on the bench.

This seems like a no brainer to me.

So to answer his question, to get an appropriate contract rate:

Take the perm salary and work out the hourly rate (dividing by 1800-2000 is a normal figure). Then multiply by two.

No, this doesn't mean that your will be getting paid twice as much. What it means is that all the paid for employee benefits: holiday pay, sick pay ma/paternity pay, pension contribution, ERNI, etc, etc, etc are amortized into the hourly rate because the employer is not paying them anymore, you are!

HTH

tim

**XLMonkey** · 19 December 2006, 17:39

but back to the OP's topic... I've had to deal with this quite a few times as a client, a team leader for a group of consultants, and as a solo contractor.

My advice is this: the definition of value (i.e. whether its worth paying xxx pounds/day to have someone sitting around on the off-chance that you might need the), is down to the client, not you. So, even though you might personally think that they're wasting their money, that doesn't mean you should intervene to "help" them realise the error of their ways.

The problem is usually that there is a disconnect between the formal and informal contracts for someone to be there:

- informal contract = I want to keep x around for the one day in twenty when the tulip hits the fan and I need his/her skills available at short notice. The comfort of having them around is worth the money
- formal contract = Joe can only charge on for days spent in the office, so he spends an awful lot of time in the office.

You might know what the formal contract is that keeps these other guys around, but you probably don't know what the informal contract is. If you try to muck about with it, then unless the level of waste is grotesque, it is unlikely that the client will really thank you for it.

**AttitudeAdjuster** · 20 December 2006, 08:36

Ok, thanks. So there is perhaps a case of Empire building along with contingency planning. Knowing the people involved at all levels I think the management do think that they need some capacity in reserve as it might be hard to get people at short notice. However, this kind of work is definately not rocket science (I know cos I'm doing it!). But I will bear these thoughts in mind before I say or do anything.

Cheers

Your opinions please