Employer wanted Perm, now thinking Contract

[PEEL]

Hi all,
Went to discuss a potential opportunity with a very very small hedge fund. They were originally looking for a perm but might now be up for considering a contractor. Are there any real selling points in getting a contractor over a permie, besides the idea that they would be not be tied down with an employee that is hard to fire if they turn out to be crap?

I also know roughly what they wanted to pay. To work out the day rate that would make them no worse off than their original permie salary idea, is it appropriate to just:
- multiply the perm salary by the NI saving above the weekly LEL
- add on the permie non-contributory 10% pension
- add on the holiday equivalent
- add on 3 (?) days worth for not having to pay sick pay
- factor in medical / life insurance etc (unsure if they offered this, didn't ask)

Thanks in advance for any guidance on the above.
Peel

[northernladuk]

But how much is being inside IR35 going to cost you......

[PEEL]

But how much is being inside IR35 going to cost you......

This crossed my mind. The work though is to build out a middle office - the infrastructure, process and risk framework (there wouldn't really be any middle office BAU since volumes are exceptionally low). I viewed it as more of a project but it certainly warrants a huge amount of consideration.

[jamesbrown]

This crossed my mind. The work though is to build out a middle office - the infrastructure, process and risk framework (there wouldn't really be any middle office BAU since volumes are exceptionally low). I viewed it as more of a project but it certainly warrants a huge amount of consideration.

Not off to a great start if they're looking for an employee, but it all depends on the facts, i.e. how work is actually done. Contract hourly rate x 1000 = permie salary is the very rough calculation that most people cite, but it's nothing more than an indication. It's about what your skills justify and what you can get away with more than them breaking even; the way you've posed the problem, they'll be walking away with the better side of this deal, gaining all the flexibility at roughly the same cost. You're probably better off taking the permie job if it's something you want that much.

[Dallas]

that screams a permie job

walk away

[northernladuk]

This crossed my mind. The work though is to build out a middle office - the infrastructure, process and risk framework (there wouldn't really be any middle office BAU since volumes are exceptionally low). I viewed it as more of a project but it certainly warrants a huge amount of consideration.

There are three people the view this... The employer, HMRC and you... Your view is right at the bottom of the list. If they want perm the way they remunerate that person makes no difference to your perceived employment status which is exactly what HMRC is looking for. Don't kid yourself.

[PEEL]

Fair enough. I imagine it would have been difficult anyway to work in quarterly / semi annual bonuses into a contract with no real milestones / work to be finished early. Perhaps I was kidding myself. I just don't like the idea of going perm again but really wanted to jump into a new field at a small startup. Perhaps I am not cut out for contracting.

[kaiser78]

that screams a permie job

walk away

Not necessarily - if it is a decent role at a decent rate, OP needs to weigh up against being caught for IR35 and whether this is a risk worth taking.

[northernladuk]

Fair enough. I imagine it would have been difficult anyway to work in quarterly / semi annual bonuses into a contract with no real milestones / work to be finished early. Perhaps I was kidding myself. I just don't like the idea of going perm again but really wanted to jump into a new field at a small startup. Perhaps I am not cut out for contracting.

But you are effectively going perm with zero benefits. You have to go in to these things with your eyes open rather than fudge it. It is like the another thread running. A guy wants to drop from perm as he had a job he didn't like. That isn't reason enough to go contracting and if you are going to go contracting and least do it properly else you will end up in no mans land between the two.