Any advice for government contracting?

[SueEllen]

Holidays, sickness, training, promotion, job security, perm benefits like gym, car etc... how much are these worth.

Government doesn't give gym and car. Some businesses do however give did points to civil servants.

[MrMarkyMark]

Any calculations to back up this?

A 400/d contract role I'd guess is the equivalent of a 50k perm job.

Perm role would net £3k per month. Plus the pension which would be worth £600pm.

A contract role @ 400/d, caught inside would net around £4800pm. Even with the new rules you can still contribute towards a SIPP.

Thats a big difference and ultimately you still get paid much more than a perm.

Ah, you are so much smarter than me....
Maybe that's because I've just started out with this

Good luck with your contractor career

[blackeye]

Ah, you are so much smarter than me....
Maybe that's because I've just started out with this

Good luck with your contractor career

Hold fire, Mr Marky Mark - I was only laying down some basic figures.

Don't be so sensitive.

[youngguy]

Any calculations to back up this?

A 400/d contract role I'd guess is the equivalent of a 50k perm job.

Perm role would net £3k per month. Plus the pension which would be worth £600pm.

A contract role @ 400/d, caught inside would net around £4800pm. Even with the new rules you can still contribute towards a SIPP.

Thats a big difference and ultimately you still get paid much more than a perm.

Don't mind them black eye, sensitivities sometimes run a bit high around here.


I looked at it from a slightly different perspective.
Say you are on £400pd
That's 8k pcm

Take off salary of say £700
Accountant £100
Insurances £20
T and S £600 (daily commute only)
Equivalent of a monthly divi , around £2500
Pension of £1000
Life insurance £10

So that's about £5k of deductions before any kind of tax.

So you now have £3k, take corp tax, divi tax, NI and then whatever the employee tax will be from April away from that.

That leaves a pretty small amount to use for training, sickness, holiday , bench time etc. It also begs the Q is that little amount more worth the 'hassle' of securing work, marketing yourself , staying current, doing director role and all it entails etc.

I'm inclined to agree with you in the sense that ppl will still be better off financially, but I don't know if that figure is worth it when you take everything into account and my guess is the figure is probably a fair bit higher than £400pd.

Only time will tell though and i look forward to the day (post autumn statement perhaps ?) When we know more and someone creates a calculator to do a ore and post April comparison.


* Obviously all my calcs are very rough and simplified...it was just as a basic illustration before people shoot me down!

[MrMarkyMark]

Hold fire, Mr Marky Mark - I was only laying down some basic figures.

Don't be so sensitive.

You've got me wrong, I'm not sensitive, just brutally realistic.
As Youngguy pointed out the "extra", albeit in no way guaranteed, is unlikely to be worth the hassle.
Even though the calcs are rough, I could have told you £400 PD is not enough as soon as you suggested it.
But as I pointed out I have been contracting around 12 years or so.
That officially makes me a moody get

[LondonManc]

Any calculations to back up this?

A 400/d contract role I'd guess is the equivalent of a 50k perm job.

Perm role would net £3k per month. Plus the pension which would be worth £600pm.

A contract role @ 400/d, caught inside would net around £4800pm. Even with the new rules you can still contribute towards a SIPP.

Thats a big difference and ultimately you still get paid much more than a perm.

The big difference come April will be the expenses side.

Say you're on a contract that you have to stay away from home on.

Weekly costs of, say:
£100 return train ticket
£10 each way to the station in a taxi
4*£70 night hotel

That's £400 per week that you'd be able to reimburse yourself from the top line.
Come April, that £400 will have to be covered by some other means; as in, based on 40 weeks a year of work, you'll have to pay all the tax on getting £16,000 out of your business. There's then the opportunity cost of not simply being able to remove your "normal" full contractor take home because you're having to get said 16 grand out to cover expenses instead. The bigger the expense bill, obviously the worse it gets.

[youngguy]

There's then the opportunity cost of not simply being able to remove your "normal" full contractor take home because you're having to get said 16 grand out to cover expenses instead..

This too. Example : I currently don't hit the higher tax bracket but to get the same amount in my pocket (and cover expenses personally) I'd have to take that much from the business PLUS the extra tax liability .

Good times....

[LondonManc]

This too. Example : I currently don't hit the higher tax bracket but to get the same amount in my pocket (and cover expenses personally) I'd have to take that much from the business PLUS the extra tax liability .

Good times....

Yes; by normal, meant not hitting the higher tax bracket. That 16k in expenses would take you well over. The other option, and one that I'd need to pursue in cases like this, would be for the client to cover my travel and accommodation expenses; not too fussed about meals as I'll be eating wherever I am.

[youngguy]

Yes; by normal, meant not hitting the higher tax bracket. That 16k in expenses would take you well over. The other option, and one that I'd need to pursue in cases like this, would be for the client to cover my travel and accommodation expenses; not too fussed about meals as I'll be eating wherever I am.

Interesting. I wonder whether some clients would consider this an option. They do T and S for many of their employees and we wouldn't have to worry about being seen as disguised employees as we were already being taxed as such.

I might start using the gym and team coffee and milk as well 😉

[SlipTheJab]

Government doesn't give gym and car. Some businesses do however give did points to civil servants.

Granted, my point was that the permies monthly salary isn't just what ends up in their bank account each month.