Is a Pension, Sick Pay and Holiday worth 33% ?

[Mearcat]

Hi All

Im in dispute over a contract where the client now wants me to display his company name on a T'shirt, I believe that this ties me up with IR35 and could be liable to pay more Tax. In my time contracting as a Ltd company a client tried to persuade me to take a full time position, one tactic he used to lure me was to say that all the benefits such as Holiday, Pension and sick pay equates to 33% on top of what he would pay me, I wish to use this information to negotiate a raise on my current rate to cover the loss of income that is created by paying back the extra tax. Would this figure seem accurate any one?

Thanks

[malvolio]

A rough estimate to get the same net income between contractor and permie is (hourly rate * 1000) = gross salary. 33% ain't that far out but you pay more tax, plus you don't work 365 days a year, so it's not really a one-to-one comparison.

However, presumably everyone has to wear the logoed shirt, so it isn't a differentiator between contractor and permie and therefore has no effect on your IR355 status.

[northernladuk]

To be honest it sounds like you are already screwed for IR35. The T-shirt sounds like the tip of the iceberg. The OP mentions they have been trying to take him on full time and used a couple of different tactics. You would assume from that they are treating him like one even if his contract doesn't reflect it.

I think the context of why he has to wear the T-shirt could be the problem. Is it at a marketing day or general promotion and he has to do what all the other permies do? Not enough facts but doesn't sound very B2B to me.

[malvolio]

To be honest it sounds like you are already screwed for IR35. The T-shirt sounds like the tip of the iceberg. The OP mentions they have been trying to take him on full time and used a couple of different tactics. You would assume from that they are treating him like one even if his contract doesn't reflect it.

I think the context of why he has to wear the T-shirt could be the problem. Is it at a marketing day or general promotion and he has to do what all the other permies do? Not enough facts but doesn't sound very B2B to me.

And if he is an engineer visiting a site on behalf of his client? You don't become IR35 because your client doesn't understand the legislation's impact. And it's not D&C if it's the same rule for everyone.

[northernladuk]

And if he is an engineer visiting a site on behalf of his client? You don't become IR35 because your client doesn't understand the legislation's impact. And it's not D&C if it's the same rule for everyone.

That is one possibility. We could guess a whole host of situations, some showing signs of being inside, some outside. The context is the key here. I could say he is wearing his t-shirt as he has been asked to promote the company at some event, just like a permie would amongst many other requests to act like a permie.

What if it is client expecting treating him like, and expecting him to be a permie? Nothing to do with them understanding legislation. There just isn't enough detail in the post to go one way or the other.

Just have to see if the OP comes back and gives some context of how his client is treating him.

[Mearcat]

That is one possibility. We could guess a whole host of situations, some showing signs of being inside, some outside. The context is the key here. I could say he is wearing his t-shirt as he has been asked to promote the company at some event, just like a permie would amongst many other requests to act like a permie.

What if it is client expecting treating him like, and expecting him to be a permie? Nothing to do with them understanding legislation. There just isn't enough detail in the post to go one way or the other.

Just have to see if the OP comes back and gives some context of how his client is treating him.

Yes.. The company has just kitted out all of its staff with a uniform. I am working along side permies and have seen no contract apart from the contract between myself and the agency which I opted out. I provide all my own equipment and can take what time I choose to have off within reason to avoid any project delays or disruption. The project manager seems out of touch with using contract labour and legislation or is perhaps playing dumb. The contractual rate is less if I add 30% to the permie hourly rate, so the client is all ready saving the £ss and now with them pushing for me to wear their company name I feel overly exploited.

[TheFaQQer]

with them pushing for me to wear their company name I feel overly exploited.

So tell them that you won't wear their shirt.

To do so under the pretension that this has anything to do with IR35 is naive.

[Dominic Connor]

I wouldn't hire anyone who'd accept the offer of employment...

Sick pay + holiday can be worth 33%, depends on how much sick pay you're planning on taking. Given that holiday is about 10% of your working days, that leave 23% to pull sickies.

Some people know they aren't at all well and this would be a good deal for them, followed by the case under the Disability Discrimination Act etc when you got sick of paying them to be sick and they sue you.

That's even before the situation where their time as a freelancer can be counted as part of their employment for redundancy etc.

[financial analyst]

The answer to the original question depends almost entirely on the level of the employer's pension contribution and the type of pension scheme they offer.

If for example they offer perms a final salary pension, their contributions could be >20% of salary, so the package is likely to be worth more than 33%.

As an alternative example, they might make a 3% contribution to a DC scheme, so you would feel very short-changed without an increased salary.

Also, bear in mind if going via an agency, that they are looking at the total cost of your rate plus the agency margin, whilst you're looking at your net rate.