Working on long (12 month) contract directly for a friends company

[TheFaQQer]

LisaContractorUmbrella and TheFaQQer are suggesting circa £325.

FWIW, that's not what I said at all.

What I said was to determine the rate you want, determine what the role pays, and negotiate. It's not for me to suggest your daily rate for an IR35-inside contract working as a permietractor.

[boshdmg]

I take people's points, that its not for them to suggest what rate I should take - that its down to me to negotiate and dependant on a lot of factors.

Cut me a little slack though - I'm just wanted a rough answer based on the numbers alone. Maybe I am asking the wrong question? What I really mean is what rate would get me the same take home pay as 65K?

So assuming I'm inside the IR35, I want 6 weeks holiday/sickness, 5% pension.

What other costs do I need to consider? Paying all of the NI? Umbrella fees? anything else?

[LisaContractorUmbrella]

I take people's points, that its not for them to suggest what rate I should take - that its down to me to negotiate and dependant on a lot of factors.

Cut me a little slack though - I'm just wanted a rough answer based on the numbers alone. Maybe I am asking the wrong question? What I really mean is what rate would get me the same take home pay as 65K?

So assuming I'm inside the IR35, I want 6 weeks holiday/sickness, 5% pension.

What other costs do I need to consider? Paying all of the NI? Umbrella fees? anything else?

That's almost impossible to answer because you don't know, as a contractor, that you will have 46 weeks work during the course of a year, you don't know if you will be sick or how often, you don't know if the contracts will be inside or outside IR35, you don't know if you will have another contract to go to when you finish the first one, you don't know if the client will like you and whether you'll get an extension and therefore whether you may be able to negotiate a rate increase. Contracting is pretty much about uncertainty

All you can do is list your assumptions and work from there. If you assume you are inside IR35 then you will pay income tax, employee's national insurance and employer's national insurance (allowances and percentages available on HMRC website), you will have to fund your own holiday and sickness so assume 8 weeks out, you will have to fund your own pension. You will also need to make sure that you have enough money to be able to put some aside to build up a war chest so you'll have some money when you are between contracts. You should also consider that you will be running a business and therefore you will have to consider the possibility that you may not get paid for some work that you do, you may get paid late because your client doesn't stick to their payment terms etc.

To be honest, if you are new to all this, try an umbrella company for a few months until you have got your head round everything and decided that contracting is definitely for you.