Starting out - very first contract - any advice?

[Ashleigh67]

Hi all,

I have just secured my first contract and I wondered if anyone could roughly calculate for me how much I would make after tax, accommodation and travel? Here are my details:

My daily rate is £250.
My accommodation will be around £500 per month including bills and council tax.
I am not sure how much travel will be for me, I will be working in the E3 area so I presume thats zone 1 in London? I plan to stay pretty close, either Bethnal green or shoreditch area so my travel costs are minimal.

I plan to claim back accommodation expenses as well as my travel expenses. A rough calculation would be very helpful for me. Hopefully someone can provide a rough figure for me.

Thanks in advance!

[cojak]

Starting out - very first contract - any advice?

Where is your main residence? If you have council tax it sounds as if you're living there and if that's the case you won't be able to claim accommodation.

[eek]

Where is your main residence in the UK? If you have council tax it sounds as if you're living there and if that's the case you won't be able to claim accommodation.

My reading is that its a room in a "shared" house where the rent includes all bills. Provided you can show a main residency elsewhere it will be fine. Especially if he can get the contract writing to reflect the fact he is only staying Monday-Friday..

[ChimpMaster]

Posting (a coherent message) here at 4am? Rate of only £250/day in London? Something isn't quite adding up here.

But as to your question, £250 a day less your accommodation, insurance, accountancy fees, bills, travel, food, taxes, cost of you going home once in a while (wherever it is you're from) etc. will leave you with very little at the end. Probably what, £120 or so a day?

A lot of these costs are fixed, so you need to increase your day rate so that you achieve a better return on your contract. For example, a more reasonable London rate of £450/day would probably enable you to take home close to £300 a day.

Not a good business venture, unless there are other less tangible benefits to the project.

[mudskipper]

How are you operating? Ltd / Brolly? Inside / outside IR35?

There's lots of contractor calculators that will calculate your take home for different scenarios given day rate, # days worked and expenses. See the useful links --->

[northernladuk]

Why use rough figures when your accountant can give you the exact ones?

[Ashleigh67]

Posting (a coherent message) here at 4am? Rate of only £250/day in London? Something isn't quite adding up here.

But as to your question, £250 a day less your accommodation, insurance, accountancy fees, bills, travel, food, taxes, cost of you going home once in a while (wherever it is you're from) etc. will leave you with very little at the end. Probably what, £120 or so a day?

A lot of these costs are fixed, so you need to increase your day rate so that you achieve a better return on your contract. For example, a more reasonable London rate of £450/day would probably enable you to take home close to £300 a day.

Not a good business venture, unless there are other less tangible benefits to the project.

It is my very first contract hence the lower daily rate. Once I build up more experience I'm sure I'll be able to charge more. I don't have accountancy fees as I am operating through an umbrella company to start off.

[Ashleigh67]

Sorry my main place of residence is in Manchester so I pay council tax there. To claim back accommodation expenses do I need to show my rental contract for my home in Manchester as well as my contract agreement in London? What if I go through a private landlord who does not have a rental agreement in writing? Would I still be able to claim back accommodation expenses as long as I can show I pay rent in Manchester?

[northernladuk]

If you are through a brolly then speak to them . They are your employer now so are best placed to advise you.

[TheFaQQer]

I am not sure how much travel will be for me, I will be working in the E3 area so I presume thats zone 1 in London? I plan to stay pretty close, either Bethnal green or shoreditch area so my travel costs are minimal.

Your travel costs are minimal, apart from getting from Manchester to London each week, which if you go by train is extortionate.

If you are going by megabus, on the other hand, they are minimal.

But without knowing how you intend to do it, and how often, then it's all guesswork.