Newbie

[phynbarr]

Hi

I'm sure most of this has been asked before so point me in the right direction if the info is already out there while I go and do some online digging

Looking for first contract. Permie Project Manager of 10 years plus experience but due to external factors now looking for Project Admin / Support role.

Had a nibble from someone who asks what salary I would be looking for on a monthly basis and also to factor in 2 round trips to their head office twice a month.

Don't want to come in too high but don't want to undersell myself either. They're not looking for Project Management but my background & experience will undoubtedly make the task a great deal easier.

And also, any other expenses or costs to factor in

Any guidance you can offer would be appreciated

[jmo21]

I can't advise on a rate, although it's a bit weird they are asking what you want a month, sounds like they don't really want a contractor.

Are you aware of all the IR35 stuff happening?

It is a tough time to start contracting. I'd strongly advise against it, and stay permie.

I'm not saying it can't be done, but just a very tough time to start.

[ContractorHardman]

I can't advise on a rate, although it's a bit weird they are asking what you want a month, sounds like they don't really want a contractor.

Are you aware of all the IR35 stuff happening?

It is a tough time to start contracting. I'd strongly advise against it, and stay permie.

I'm not saying it can't be done, but just a very tough time to start.

I completely agree with this. Contracting is going through an extremely tough time. You just need to look at this forum to understand that even the most seasoned contractors are going through tough times.

If you are serious about it then you need to take your rate of income you had and double it completely to help you build up a buffer for the months you may be out of work.

Also, you need to ask if it is inside or outside IR35. Inside, you cant claim expenses for travel, outside and you can.

Next you need to factor in company costs. Insurance, Setting up a company and of course an accountant unless they want you to go through an Umbrella company.

Either way, it would be best to seek out an accountants view. Someone like SJD maybe perfect to advise someone new however you really need to research what you are about to do and think very carefully about these times.

If they are asking how much you want a month, it sounds like this might be caught inside IR35.

[filthy1980]

£250 per day

[northernladuk]

Terrible time to start. Every experienced contractor and his dog will be going for your roles right now and whatever advice we give now will likely be completely wrong in 3 months and you are going to have to come back with a whole host of questions and you won't like the answers, particularly if it's the money that's drawn you to contracting.

[Eirikur]

Project support contracts generally go for 250-300 per day

[GhostofTarbera]

£250 per day

Sounds about right for project support work

I would not advise my worst enemy to go contracting right now with 600 applications for each project manager role


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[M12]

"due to external factors now looking for Project Admin / Support role"

I would highly recommend that if you can , stick it out as a permie until the dust settles next year. As everyone has said it is the worst time to go contracting.

[LetterBox]

Hi

I'm sure most of this has been asked before so point me in the right direction if the info is already out there while I go and do some online digging

Looking for first contract. Permie Project Manager of 10 years plus experience but due to external factors now looking for Project Admin / Support role.

Had a nibble from someone who asks what salary I would be looking for on a monthly basis and also to factor in 2 round trips to their head office twice a month.

Don't want to come in too high but don't want to undersell myself either. They're not looking for Project Management but my background & experience will undoubtedly make the task a great deal easier.

And also, any other expenses or costs to factor in

Any guidance you can offer would be appreciated

Don't run towards the fire.

You need to get the rate out of the agent (I assume nibbler was agent), just say you know the market rate and ask what the end client is offering. There are many reasons for contracting as opposed to permanent employment, but to keep it simple, you still need to check the financial feasibility. Do not worry about what has gone on in the past, if you heard great things about the financial benefits in the past then that can all but be ignored as next year it all changes.

So, financial feasibility will be to get the rate being offered out of the agent,if they are asking in salary terms then it may be a fixed term contract (FTC), these are usually longer than standard contracts (12 months perhaps) but all that i have seen have a pro-rata amount which is no more than a perm salary anyway, so purely financially, these offer nothing.

Assuming it's not a FTC you'll be advised of a day / hour rate for the contract, you can then provide services one of 2 ways (for simplification), either through an Umbrella (PAYE) company or via your own Ltd company (PSC). If you choose umbrella then ultimately your rate is converted back into a salary, this is only financially beneficial if after the conversion you are significantly better off.

Example:

70k gross is 4k pm net
To make 4k pm net when going through an umbrella (PAYE) you'll need a rate of 375pd

Again, thinking just financially about contracting, that rate will not be enough when using common sense. That 70k permie job has benefits both offered and implied, which must not be dismissed. Pension contributions, private health care, training, yearly bonuses, sick pay, genuine notice period, even severance pay if you're let go. I have ignored paid holidays as it is included in that the 375pd implies you only work 10 months of the year due to holidays etc. On the flip side, you have the risk of being taken off the contract early, so you may assume 10 months of the year in contract, but what if you're let go of early and you have only worked 8 months of that year? The permie has that insurance policy of notice period and severance pay, while you realise that the 375pd being offered over 8 months doesn't add up.

The only way the above works is if the rate is way outside the perm wage, so 375pd for a 35k gross job is fine, or 700pd for a 70k job is also fine. The market is very rarely this generous, the differential is much much smaller, purely from a financial POV, it makes no sense.

The common method is to run your own Ltd company (PSC) providing a B2B relationship with your clients, this way your business receives the entire income from your rate and you can make your own decisions on being tax efficient. This greatly helps with the fact that the differential mentioned in the previous paragraph is not large enough to offset the benefits of being a permie.

It's much more complicated in reality, but I have tried to keep the bottom line simple. Purely on a financial level you need the differential to be as big as possible to offset the risks. This can either be done by the market or you, the market will not offer a large enough differential unless they are desperate for niche skills, as this is very much the exception rather than the rule the onus is on you to provide as best you can this difference, which is the Ltd company.

As of April 6th 2020, the 20 year IR35 (read up) liability is moving from the contractor and onto the end client, *every client* is refusing the risk and simply no longer allowing Ltd companies for the contracts and will only deal with those contractors who use umbrellas, and as previously mentioned, these make no sense financially to the contractor. So contracting from a financial POV no longer makes sense, hence everyone is closing their companies and hunting around for permie jobs.

Of course *every client* is a little dramatic, but it was there to indicate the dire situation that is about to unfold.

I have no actual numbers but have been contracting for 20 years, so I expect the turnaround to be immense.

I'd say 80% of all IT contractors are doing jobs to supplement the end client head count, the client has no risk and has the flexibility, the contractor needs to use the Ltd method as it is the only feasible financial method, the IR35 risk is all on the contractor anyway, so all is well for client and contractor. Now the IR35 risk is on the client end, the clients are refusing Ltd companies, and IMO this is in a very large part due to the clients legal teams looking over the contractors they have and the guidance of HMRC and saying, oh, we can't justify this position if we were pushed on it, so bye bye Ltds, come back as umbrellas, contractor says that does not make financial sense, client says here is a tiny bit more money, contractor says that's still no better than permie package, client says tough luck kiddo.

That last paragraph was just to put some meat on the bones of what you can expect if going or an admin / support or even management contract role post April 2020 as you mention. Joy!

[Dhrucku]

Terrible time to start. Every experienced contractor and his dog will be going for your roles right now and whatever advice we give now will likely be completely wrong in 3 months and you are going to have to come back with a whole host of questions and you won't like the answers, particularly if it's the money that's drawn you to contracting.

I disagree.

Although Perm is safer, there are still inside gigs going for £550 / day in Project Management and £400. I agree that there's a general contraction in the market but folding under this pressure and automatically defaulting people into a Perm role is not the kind of advice that should be given on this forum.

Advice from me would be to find an outside IR35 one at a rate of £350-400 which are becoming increasingly prevalent as companies realise that flexibility in workforce is required but don't want the risk of keeping people outside.