The great IR35 swindlle

[malvolio]

I'd rather taxation was out of the question, sadly it's not, we're in the IR35 thread, and its divs vs PAYE.

Re Engaging a contractor being lower than a permie, got any figures or links about that? I'm intrigued!

All the contracts I've been on have been paid around double what a perm would get, they don't make that back up in NI or pension contribs.

If you don't undersand the basic economics, why are you arguing?

A contractor doesn't get paid 365 days a year, more like 240. He pays his own Employer's NICs, pension funding, businesss insurances, extended notice periods, training, SSP, death in service benefit, stationery and accountancy fees. He doesn't have to support a management structure and pay rises, nor fixed overheads such as career assessments, HR time and the desk he sits at. Nor does he get paid for non-productive time and nobody has to budget for him being there until age 65 (or even 67).

Cost of employment for a middling worker is around 200% of their salary. Average contract rates are around 50% above equivalent salary. So a £40 permie will cost his employer £80k a year, whereas a the equivalent £350 a day guy will cost £81k if he works every day possible.

[richy]

If you don't undersand the basic economics, why are you arguing?

I think you've misunderstood my point, I was taking about the tax, the difference is not simply the tax, as that still leaves a lot of extra cash going to the contractor to cover downtime. That gap, permies get paid less due to pension and year long job, etc, etc, etc.

The reason I get more as a contractor is because I need to fund my own: pension, bench time, holidays etc

However, been lucky (or have the right talent) so far, 4 years contracting, only one month gap, which worked out quite nicely, took a long hol