How much rate rise to cover no expensese after 2 year rule kicks in?

[Sausage Surprise]

Currently claim around £1000 a month for accommodation, mileage and subsistence.
When this all stops after the 2 year rule kicks in, how much extra per month would you need to cover it with a rate rise?


Edit: Bollocks - typo in header!

[TheFaQQer]

£1000 a month. Add on 40%, divide by 20 working days a month = £70

Good luck.

[SlipTheJab]

I've got the same problem at end of June. If I renew I am caught by the 24 month rule. Given that my commuting costs are around £1600 a month I am going to be taking a big hit. Reckon a 5% rate rise should cover it so I'll ask for 10% come negotiation time

[Sausage Surprise]

£1000 a month. Add on 40%, divide by 20 working days a month = £70

Good luck.

I was thinking I'd only need to cover the tax element, which is where we save after all?

[TheFaQQer]

I was thinking I'd only need to cover the tax element, which is where we save after all?

You could see it that way

So 40% of the £1000 a month = £400

Plus the 20% that your company now pays corporation tax on = £200 a month

£600/20 = £30 a day

Ask for £50

[stek]

You could see it that way

So 40% of the £1000 a month = £400

Plus the 20% that your company now pays corporation tax on = £200 a month

£600/20 = £30 a day

Ask for £50

What about the BIK?

[psychocandy]

Has anyone EVER managed to get client to agree to this based on contractor explaining the 24 month rule to them?

Can just see it.

Contractor: Thing is for 2 years I've managed not to pay tax on all my travelling costs and saved myself couple of £100 a month in tax.

Client: You mean travel to work like us permies pay for out our net salary? That must be nice for you.

Contractor: Yes. Thing is I want £x per day to cover this or I'll be worse off.

Client: So you've been here 2 years, getting x times more than the permies, you've been milking the tax system, and now its over you want us to pay more?

Contractor: Yes please.

(BTW. Not saying I agree with this conversation but this is how client may think rightly or wrongly. 90% IMHO seem to think the start rate is the rate forever).

[Sausage Surprise]

Has anyone EVER managed to get client to agree to this based on contractor explaining the 24 month rule to them?

Can just see it.

Contractor: Thing is for 2 years I've managed not to pay tax on all my travelling costs and saved myself couple of £100 a month in tax.

Client: You mean travel to work like us permies pay for out our net salary? That must be nice for you.

Contractor: Yes. Thing is I want £x per day to cover this or I'll be worse off.

Client: So you've been here 2 years, getting x times more than the permies, you've been milking the tax system, and now its over you want us to pay more?

Contractor: Yes please.

(BTW. Not saying I agree with this conversation but this is how client may think rightly or wrongly. 90% IMHO seem to think the start rate is the rate forever).

The permies and all of the contractors bar me all live within 10 miles - I live 260 miles away. They know how it works.

[Magpie252]

£1000 a month. Add on 40%, divide by 20 working days a month = £70

Good luck.

Nope, the £1,000 is currently pre tax

To get £1,000 post tax he needs to earn an extra £666.66 or £33.33/day

[psychocandy]

The permies and all of the contractors bar me all live within 10 miles - I live 260 miles away. They know how it works.

Not saying its correct but this is sometimes how permies think. Work overtime and see a huge chunk gone in tax then find out contractors get to pay less tax by claiming for all sorts. Doesnt go down well sometimes.

Of course, a lot will say, work 260 miles/no sick pay/no holiday pay/no pension/no job security not for me as well of course, which is their choice.