NHS worker forced into contracting? Read this

[cojak]

Note: this thread is NOT for the usual IT Contractor posters on this site and will be heavily moderated. All posts will be welcome if they are helpful.

I have noticed an increase in new posters to the CUK forums who do not come from the usual route of IT/Engineering/Oil & Gas industries.

Many of them have come from local government or the NHS (edit, or even CIS). Also many of them seem to be having problems when it comes to getting paid or paying tax.

But there is also a worrying trend.

Many did not want to become contractors. They wanted permanent and stable employment working for the same employer, in the same place, and not be troubled by HMRC.

These are the people I’m talking to in this post.

If you see yourself in this description you may have read the forums of CUK and been dismayed by the lack of empathy and sympathy for the predicament you find yourself in.

We are not heartless gits (well, not all of us…), it’s just that we are voluntary contractors. We value the lifestyle, we like that we are not tied to an employer and we can leave whenever we choose (more or less). We see ourselves as a business –

• If we don’t like the terms and conditions of a new contract, we don’t sign and we don’t work for the client.
• We understand and choose to work either inside or outside of IR35 (see above) and understand the tax implications of our choices.
• If we come to the end of a contract and aren’t happy with the money or work, we will leave the client and look for more money or better work.

This is why we give the advice that we do – it follows that mode of work and thinking.

You, of course, don’t want that kind of lifestyle.

So, I am going to give some advice here that I would not place anywhere else on the forum.

You need help in two areas:

• Pay and tax
• Support

Pay and Tax

If you are working for the Public Sector (PS), I am 95% sure that you will be working inside IR35 – if the client says that you are outside ‘just to increase your pay packet’ I am 100% certain that they are in the wrong.

1.) Before you sign the contract, look up how much you will get in your bank account at the end of the month.

Use this calculator as an example: Umbrella Company PAYE Calculator | Contractor Umbrella

2.) Use a legitimate umbrella; you do not want the hassle of paying your own tax and an accountant. But the important word is ‘legitimate’ - see this link for advice on how to do that: PS & IR35: Choosing a legitimate Umbrella

The important things to consider when choosing an umbrella is their customer service and how stable they are – you don’t want them going bust with your money in their bank account.

Do NOT go with an Umbrella that promises you more than 65% of your day rate as take-home pay - they are tax avoidance vehicles and you don't want to go there - see HMRC Scheme Enquiries for the poor souls who did not realise this.

Support

This is the most controversial part of my advice, but I think that it applies to you. I think that you should join a union.

There is an organisation called IPSE (Association of the Independent Professional and the Self-Employed), but that organisation is for people who want to be Independent Professionals or the Self-Employed – you don’t.

Update: IPSE is proving a lot more sympathetic about this than I expected. Contact them for help. Homepage | IPSE

Look at Unite or Unison and look at how they can help you.

Agency and temporary workers | Vulnerable workers | UNISON National

http://www.unitetheunion.org/how-we-...becomeamember/

There may be problems with this approach and I certainly would not tell an agency or client if you do join one.

But I would seriously consider it.

Despite what we say, we are genuinely sorry for those people who have been caught by the increasingly aggressive tactics of HMRC who see a loss of tax, and unscrupulous/cash-strapped employers who are kicking out their employees and bringing them back as ‘contractors’ without worker's rights or support, as HR and support costs money and quite frankly they don’t care.

Find someone who does care – find a union to help you.

(and come to this thread – ask your questions here.)

[cojak]

Living Wage example

I was trying to decide how to show an example of a pay packet that you may be considering.

Since all types of people are moving into contracting, I decided to go for the lowest - the Living Wage.

The Living Wage as of 23/08/18 is £7.83 per hour.

For an 8 hour day this comes to £62.64 per day.

However, you have tax, Employee's and Employer's NI, The Umbrella's commission and a few other things to pay out, so we have to see what you will need in order to get to that figure in your bank account.

But there are 'nice' round figures in the calcs, so I moved it up by less than a tenner and we are looking at £71.65 pd.

To get £71.65 in your bank account you will need to charge the client £100 per day (£500 pounds per week).

Or £358.26 per week (£71.65 x 5) in your bank account.

Use £500 pw in the calculator above to get the breakdown of costs.

But remember one thing. That £100 per day will not cover the time you go on holiday or fall sick. You will need to put some of your day rate to one side to cover those things (we call those savings our warchest).

If you manage your finances carefully and put some money to one side you will be able to make this work, but you can see that this would be difficult to do on £100pd.

[Old Greg]

Bump. 20 years ago this model existed but agencies would put you on their payroll. That's how I got into the NHS, thence into IT, thence into contracting.

The key here is that you need employee rights and benefits, unless you really want to do the odd day casually. I agree that a union is the way to go in theory, but I don't know how good they would be in practice. ACAS may be worth trying but I have no experience of this.

Your rights as an agency worker: Equal treatment - GOV.UK

Take a look at this for your rights after 12 weeks.

Your rights as an agency worker: Equal treatment - GOV.UK