How work out the equivalent rate for inside IR35?

[LondonManc]

Just train travel


it'll be 6 weeks when I reach 5 April. Though I have worked at my current client before 19 months ago.


hmm thanks. I think I will bail out.

Sad thing is, you're risking future income to protect past income. Not a nice situation for you to be in

[LondonManc]

Paid weekly, with a special payment run just before April 6th

That allows all those that are risk averse to get out. At least your agency is on the ball.

[northernladuk]

Should be leaving and retro tax aside... Question I'd ask is.. How much is it worth to you? There could be other factors like convenience that make it worth it. In theory (all this doesn't seem true for many PS contractors) we only work for short term gigs so if there are other factors in play a lower rate just for a period isn't the end of the world. It's not exactly putting us on the breadline and might be worth it to avoid benchtime in the interim. Thing is though you've got to think like it's short term and go at sometime. To take the hit and then sit there expecting it to last forever isn't part of the plan. Watching some of these threads that certainly does seem to be the mentality of some PS 'contractors'

[chineseJohn]

Sad thing is, you're risking future income to protect past income. Not a nice situation for you to be in

Though the end is nigh with contracting in the current format. I'm lucky I've had a good 15 years of contracting. Those newbies trying to get into contracting ...

[LondonManc]

Should be leaving and retro tax aside... Question I'd ask is.. How much is it worth to you? There could be other factors like convenience that make it worth it. In theory (all this doesn't seem true for many PS contractors) we only work for short term gigs so if there are other factors in play a lower rate just for a period isn't the end of the world. It's not exactly putting us on the breadline and might be worth it to avoid benchtime in the interim. Thing is though you've got to think like it's short term and go at sometime. To take the hit and then sit there expecting it to last forever isn't part of the plan. Watching some of these threads that certainly does seem to be the mentality of some PS 'contractors'

Given the tiny percentage of PS contractors who have actually made their way on to here, I can't see them being proactive enough to get out and get paid up by April 5th.

Either they don't want to, are accepting that they have had a good run and simply accept that they're now PAYE or are blissfully unaware of the impact (until payday or Retrograb day). Personally, I'd be asking to switch to FTC rather than messing around with Ltd or Umbrella (sorry Lucy!)

[WordIsBond]

it'll be 6 weeks when I reach 5 April. Though I have worked at my current client before 19 months ago.

Whoa, hold it. This is a better story. I'm not sure you have to leave if they'll increase your rate. Six weeks is not that much.

I'm assuming the prior contract was on a separate project, and the current contract is totally different from it.

Given that, you are only risking 6 weeks. And you can probably attribute ALL of your salary for the current tax year toward the deemed payment on that six weeks of income. So your historical risk is probably very, very low, and chances are they wouldn't even go after you anyway for six weeks worth of contract.

So, if you have nothing else lined up, and you don't want a break, and you like what you are doing and want to continue, you could do this:
1. Operate your last six weeks as inside IR35. Attribute any pension contributions this year to that contract. Attribute any salary paid this year to that contract. It's not going to cost you much, if anything.
2. Figure out how much you'd need to stay inside IR35, and give them that number.
3. Tell them you have to move on quickly so you need an answer by the end of the week.

If you are concerned you might have trouble getting another contract, and don't have a deep warchest, you could tell them, "Look, I would need 40% more (or whatever it is), but I'll settle for 25%." It's an effective rate cut, but not a huge one. They might have a hard time swallowing a 40% increase, but maybe not 25%.

If, on the other hand, you'd be happy to take some time off, go for the whole 40%, tell them they are putting your last six weeks at risk, too, and tell them you need a nice little signing bonus to compensate you for that.

In short, I don't think you've got a lot at risk here as far as the past is concerned, so if you want to stay and they are going to pay you to do so, you probably can do that. It's not like you have 2 years of contracts at risk here.

[MrMarkyMark]

Whoa, hold it. This is a better story. I'm not sure you have to leave if they'll increase your rate. Six weeks is not that much.

I'm assuming the prior contract was on a separate project, and the current contract is totally different from it.

Given that, you are only risking 6 weeks. And you can probably attribute ALL of your salary for the current tax year toward the deemed payment on that six weeks of income. So your historical risk is probably very, very low, and chances are they wouldn't even go after you anyway for six weeks worth of contract.

So, if you have nothing else lined up, and you don't want a break, and you like what you are doing and want to continue, you could do this:
1. Operate your last six weeks as inside IR35. Attribute any pension contributions this year to that contract. Attribute any salary paid this year to that contract. It's not going to cost you much, if anything.
2. Figure out how much you'd need to stay inside IR35, and give them that number.
3. Tell them you have to move on quickly so you need an answer by the end of the week.

If you are concerned you might have trouble getting another contract, and don't have a deep warchest, you could tell them, "Look, I would need 40% more (or whatever it is), but I'll settle for 25%." It's an effective rate cut, but not a huge one. They might have a hard time swallowing a 40% increase, but maybe not 25%.

If, on the other hand, you'd be happy to take some time off, go for the whole 40%, tell them they are putting your last six weeks at risk, too, and tell them you need a nice little signing bonus to compensate you for that.

In short, I don't think you've got a lot at risk here as far as the past is concerned, so if you want to stay and they are going to pay you to do so, you probably can do that. It's not like you have 2 years of contracts at risk here.

As always the devil is in the detail

[LondonManc]

Whoa, hold it. This is a better story. I'm not sure you have to leave if they'll increase your rate. Six weeks is not that much.

I'm assuming the prior contract was on a separate project, and the current contract is totally different from it.

Given that, you are only risking 6 weeks. And you can probably attribute ALL of your salary for the current tax year toward the deemed payment on that six weeks of income. So your historical risk is probably very, very low, and chances are they wouldn't even go after you anyway for six weeks worth of contract.

So, if you have nothing else lined up, and you don't want a break, and you like what you are doing and want to continue, you could do this:
1. Operate your last six weeks as inside IR35. Attribute any pension contributions this year to that contract. Attribute any salary paid this year to that contract. It's not going to cost you much, if anything.
2. Figure out how much you'd need to stay inside IR35, and give them that number.
3. Tell them you have to move on quickly so you need an answer by the end of the week.

If you are concerned you might have trouble getting another contract, and don't have a deep warchest, you could tell them, "Look, I would need 40% more (or whatever it is), but I'll settle for 25%." It's an effective rate cut, but not a huge one. They might have a hard time swallowing a 40% increase, but maybe not 25%.

If, on the other hand, you'd be happy to take some time off, go for the whole 40%, tell them they are putting your last six weeks at risk, too, and tell them you need a nice little signing bonus to compensate you for that.

In short, I don't think you've got a lot at risk here as far as the past is concerned, so if you want to stay and they are going to pay you to do so, you probably can do that. It's not like you have 2 years of contracts at risk here.

Correct, the six weeks tax isn't a biggy. as you say. I never suggested jumping and was simply pointing the generic perils of staying, in terms of rate required, with a massive "it depends" caveat.

Warchest is always key in these things too - can you afford to walk?

[chineseJohn]

Warchest is always key in these things too - can you afford to walk?

Yes I can afford to walk. Warchest not an issue. Plus Mrs CJ earns more than me

[LondonManc]

Yes I can afford to walk. Warchest not an issue. Plus Mrs CJ earns more than me

You make me sick. Do what the hell you want.