State of the Market

[TheDude]

How is this possible, were your outside rates just that low, or is this a form of copium?

It is possible and in any case I did not run my LTD to avoid paying every penny of tax. I did not 'employ' my spouse, I did not expense travel or lunches etc.

[TheGreenBastard]

It's simple

Outside IR35 rate in my field is max £600 a day (usually consultancies)

Inside IR35 rates are £700-£750 (usually banks)...

The differential would need to be much greater in my position, I assume this predicates on taking all "company" income as personal income.

[eek]

The differential would need to be much greater in my position, I assume this predicates on taking all "company" income as personal income.

No and why would the differential need to be higher - the employer NI is being paid within the uplift and the employee NI is fairly low if you know how to game things correctly (max income some months, max pension others don't 50-50 it).

If you plan the game correctly - you get more out of an inside IR35 than you could with an outside one. Remember the deferential is £25,000 or so which is a lot of extra money going straight into the pension pot.

But I do know all the rules well enough (including the points at which you can change pension deductions) to have played this game exceedingly well....

[TheGreenBastard]

No and why would the differential need to be higher - the employer NI is being paid within the uplift and the employee NI is fairly low if you know how to game things correctly (max income some months, max pension others don't 50-50 it).

If you plan the game correctly - you get more out of an inside IR35 than you could with an outside one. Remember the deferential is £25,000 or so which is a lot of extra money going straight into the pension pot.

But I do know all the rules well enough (including the points at which you can change pension deductions) to have played this game exceedingly well....

Doesn't add up at all with multiple clients. Pensions are efficient as a Ltd, and outside contracts don't require you to lock in contributions to remain "efficient". So this is a healthy dose of copium.

[eek]

Doesn't add up at all with multiple clients. Pensions are efficient as a Ltd, and outside contracts don't require you to lock in contributions to remain "efficient". So this is a healthy dose of copium.

why would I want multiple clients - way too much stress

Also - outside IR35 = less money and probably more work....

[SussexSeagull]

Oddly I haven't ever done and an Inside contract (although as I am not doing an Inside or Outside contract at the moment that isn't really a boast) but the ones I have looked at generally have enough uplift to justify commuting (London is about £600 a month for me) but not working away from home during the week.

The latter scenario would now mean a serious daily rate or expenses being paid.

[TheDude]

Over the last couple of weeks I have noticed rates for the big banks have definitely dropped from the end of last year and rates on offer are 10-20% lower.

[PerfectStorm]

Over the last couple of weeks I have noticed rates for the big banks have definitely dropped from the end of last year and rates on offer are 10-20% lower.

January - clients don't hire because they are recovering from Christmas
February - clients don't hire because they take time off for skiing in half term and then a week either telling their colleagues about it or in hospital
March - clients don't hire because they are waiting for the new tax year <- you are here
April - clients don't hire because they haven't got all the budget they wanted
May - clients don't hire because they are off for half term and then spend a week talking about it.
June - clients don't hire because they are planning summer holidays
July - clients don't hire because they are winding down for the summer holidays
August - clients don't hire because they are on holiday
September - clients don't hire because they are thinking back to their holidays
October - clients don't hire because they are on half-term holidays and then bragging about them
November - clients don't hire because they are planning Christmas parties and holidays
December - clients don't hire because they are partying and then on holiday

Pick your time for looking for a new contract carefully.

As noted above

[Snooky]

No and why would the differential need to be higher - the employer NI is being paid within the uplift and the employee NI is fairly low if you know how to game things correctly (max income some months, max pension others don't 50-50 it).

If you plan the game correctly - you get more out of an inside IR35 than you could with an outside one. Remember the deferential is £25,000 or so which is a lot of extra money going straight into the pension pot.

But I do know all the rules well enough (including the points at which you can change pension deductions) to have played this game exceedingly well....

Can you explain this a little more for a dimwit like me?

[rocktronAMP]

Can you explain this a little more for a dimwit like me?

Is this something to do with the Personal Allowance reduction starting at gros £100K salary for the next tax year?
Your PA reduces by £1 for every £2 earnt up from £100,000 until £125,000 per salary (At £125,000 gros salary per annum you have zero £0 PA - it disappears).
Therefore, if you can ask your employer to execute a Salary Sacrifice to transfer (£X - £100K) into a penson pot then you get that benefit in later life.
I am not sure what an Umbrella company will do to match the SS pension contribution, if they do that.
Note: this is for Inside IR35 or FTC