Getting started as a contractor

**Sockpuppet** · 19 April 2007, 20:32

Sigh,

1. Yes, depends on what they charge.

2. Search

3. I'd hazard a guess at not but dont know what your contract is like. @ £400 a day is the extra quid you save in tax really worth the hassle.

4. The same as PAYE minus any expenses (which I'll say you will have none of).

So mostly search.

**jor-el** · 19 April 2007, 21:24

thanks

Originally posted by Sockpuppet

Sigh,

1. Yes, depends on what they charge.

2. Search

3. I'd hazard a guess at not but dont know what your contract is like. @ £400 a day is the extra quid you save in tax really worth the hassle.

4. The same as PAYE minus any expenses (which I'll say you will have none of).

So mostly search.

Thanks for your reply.
Yes, I have searched this forum and even spoke to quite a few companies and the 3 I mentioned sounded the best to me but as I'm new, I thought you ppl would have current and relevant insight on these companies.

They all charge pretty much the same so I don't get how their calculations differ. Thanks for your help and sorry for the newbie Q's. I'm a fast learner, though ;P

**Lucifer Box** · 19 April 2007, 21:29

Read the stickies in the accounting forum and the first timer guides here and at www.pcg.org.uk. Essentially though the calculations will differ based on different assumptions about your circumstances, unsurprisingly. Beware umbrellas who inflate their take home figures with bogus expenses and beware also of the "dispensation" scam. A read through the accounting forum will familiarise you with these.

**zathras** · 20 April 2007, 08:52

Originally posted by jor-el

Hello all,

I am a few weeks from my very first contract. Initially it's a 6 months one after which I'll see if I like this better than a permanent position.

I think I'll go with an umbrella company to start with as I don't want to open a ltd company just for a few months.

I have a few newbie questions so please bear with me

Firstly, the umbrella company - I'm aware of the services they provide but besides the level of service, do they make different calculations on the net, take-home salary? i.e. is it possible to have a few hundred pounds difference between several companies with the same contract?

Which one would you recommend? My finalists are: OrangeGenie, Contarcor Umbrella and Parasol. any preference?

Also, I'm not expected to claim any expenses as I will be living 15 minutes walk from my office so no traveling or b&b but what is this Subsistence expense? Can anyone claim that? what is the rate of this?

Finally, what % of my contract should I expect as a take home as monthly salary? (assume £400 daily rate).

Thanks for your answers and patience.

Jor El

Parasol are the Brolly behind the PCG Quality Umbrella(http://www.pcg.org.uk/cms/index.php?...361&Itemid=483)

The subsistence is for those working away from home. As you are not, then this will not apply.

With any Brolly you will be PAYE. I have not got the figures handy but your costs will be the same as if you were employed less the Brolly Fee. If you went with the PCG-QU then this also includes PCG Membership in the Fee (Standard).

Being with a Brolly is not the most tax efficient, and actually gets you the least amount of take home pay. If you are concerned about setting up have you also considered the PCG OneStop service (http://www.pcg.org.uk/cms/index.php?...320&Itemid=622)

**SoupDragon** · 20 April 2007, 09:24

I intend to use the FPS Umbrella...

http://www.charterhouseplc.com/index.html

Fees are only 15 quid a week

I used their composite company while that was still permitted and it was always run efficiently.

**malvolio** · 20 April 2007, 09:30

Originally posted by SoupDragon

I intend to use the FPS Umbrella...

http://www.charterhouseplc.com/index.html

Fees are only 15 quid a week

I used their composite company while that was still permitted and it was always run efficiently.

And on the top of the front of their website is the statement "Inside IR35? You can benefit by claiming allowable expenses"...

Nuff said. Was that coffee I could smell?

**SoupDragon** · 20 April 2007, 09:37

Originally posted by malvolio

And on the top of the front of their website is the statement "Inside IR35? You can benefit by claiming allowable expenses"...

Nuff said. Was that coffee I could smell?

No - they don't make wacky claims re: expenses / dispensations. You can only claim things like business travel and such.

**malvolio** · 20 April 2007, 10:04

Originally posted by SoupDragon

No - they don't make wacky claims re: expenses / dispensations. You can only claim things like business travel and such.

Fair enough; must admit I stopped looking. However I suggest you check out "business travel" and such a bit more, since there have been arguments that the "normal place of work" definition is now the client site, not your home address nor the umbrella offices, hence business mileage may not be claimable...

You're still wasting money though, there are better margins through your own company even inside IR35. But to each his own.

**jor-el** · 20 April 2007, 11:17

Ir35

When I first offered this contract I was told I will be taking home something between 75%-80% of my contract. Well...this is certainly not the case now that I'm actually talking to umbrellas companies.

I'm quite confused with the IR35 concept. Why am I considered in if I use an umbrella company? If I use my own ltd will be in or out?

I guess for me, because I'm not likely to have expenses, the tax will be the worst possible i.e. in IR35 and no expenses. Any way to avoid this?

As for choosing an umbrella company - Parasol gave me the best take-home rate but I guess they use different parameters in their calculation because as I understand it - I should be getting net paid the same with every company minus their fees. is it right?

Getting started as a contractor