Reply to: Take home pay from £300/day?

[lucyclarityumbrella]

Or you could save all the confusion as it is your first time and go brolly until you settle into the contracting world properly, especially as it is only 4-6 months.

And yes before you all jump on me, I know it isn't going to do the rate any good but at least it will give some time to do some proper research on the LTD side of things. Just a thought

[Lance]

Take home pay from £300/day?

The company has finally approved my contract, after re-evaluating the cost, because they had underestimated the cost of a contractor. So they are happy with £300/day.

My accountant suggested to register for VAT as well, but that would mean I would have to charge them £300 + VAT. They had trouble getting the budget approved for the daily rate only. I am thinking it could get them to back down if I ask them to pay VAT on top of the normal daily rate.

What do you guys think?

Wow. They are either daft, cheapskates, or taking the mickey. The beauty of a 300/day contractor is they don't have all the permie overheads. If they struggle to get that then I'd be really, really cautious as they don't sound like they'll be able to retain you as soon as one of their customers flunks an invoice.
What you mustn't forget is that contracting is a 2-way thing. The client gets a load of bonus as well as they don't need to insure you, pay your pension, pay for for sick or holidays.

Sounds like they just cannot afford someone but you are just about affordable as you're cheap and easy to bin.

BEWARE.

[malvolio]

The company has finally approved my contract, after re-evaluating the cost, because they had underestimated the cost of a contractor. So they are happy with £300/day.

My accountant suggested to register for VAT as well, but that would mean I would have to charge them £300 + VAT. They had trouble getting the budget approved for the daily rate only. I am thinking it could get them to back down if I ask them to pay VAT on top of the normal daily rate.

What do you guys think?

VAT is reclaimable so is not part of their costs, assuming they are VAT registered themselves.

[Braba]

The company has finally approved my contract, after re-evaluating the cost, because they had underestimated the cost of a contractor. So they are happy with £300/day.

My accountant suggested to register for VAT as well, but that would mean I would have to charge them £300 + VAT. They had trouble getting the budget approved for the daily rate only. I am thinking it could get them to back down if I ask them to pay VAT on top of the normal daily rate.

What do you guys think?

[Chart Accountancy]

But that decision should be made on his situation, not just chasing 14 quid surely?

If it will be a voluntary VAT registration, it will be the benefit of registering that will be considered and best discussed with an accountant before making any decisions. Unfortunately, with the limited cost trader, the benefit of a voluntary vat registration is not significant.

[northernladuk]

You could generate a small surplus if you register for VAT. In the first year, you get 1% discount to your flat rate%. On every £1K invoiced, you will get additional £14 flat rate surplus before tax.

But that decision should be made on his situation, not just chasing 14 quid surely?

[Chart Accountancy]

Thanks for all the replies.

I've worked it out to be at least £1000 more a month and that's including pension and insurance. It's my first contract and they are willing to wait 4 weeks in regards to my notice period, which not many companies do.

It's a software developer role in Berkshire.

However, you are right. £300 is the lower end. It's a 4 - 6 month contract and hopefully once I finish or renew the contract I can find/negotiate a higher rate or different contract.

Is it possible to negotiate a higher rate on contract renewal? Has anyone experience with that?

You could generate a small surplus if you register for VAT. In the first year, you get 1% discount to your flat rate%. On every £1K invoiced, you will get additional £14 flat rate surplus before tax.

[PurpleGorilla]

It's not through an agent. It's actually directly with the company.

In which case - £300 sounds really low.

[Braba]

It's not through an agent. It's actually directly with the company.

[stek]

Thanks for all the replies.

I've worked it out to be at least £1000 more a month and that's including pension and insurance. It's my first contract and they are willing to wait 4 weeks in regards to my notice period, which not many companies do.

It's a software developer role in Berkshire.

However, you are right. £300 is the lower end. It's a 4 - 6 month contract and hopefully once I finish or renew the contract I can find/negotiate a higher rate or different contract.

Is it possible to negotiate a higher rate on contract renewal? Has anyone experience with that?

A contract is for only as long as the week you got paid. Ignore contract periods, they mean nothing.

[northernladuk]

Thanks for all the replies.

I've worked it out to be at least £1000 more a month and that's including pension and insurance. It's my first contract and they are willing to wait 4 weeks in regards to my notice period, which not many companies do.

It's a software developer role in Berkshire.

However, you are right. £300 is the lower end. It's a 4 - 6 month contract and hopefully once I finish or renew the contract I can find/negotiate a higher rate or different contract.

Is it possible to negotiate a higher rate on contract renewal? Has anyone experience with that?

It is but only if you know what you are doing and are any good at negotiating. Half hearted attempt to ask politely will fail. They do this as their job so if you can't come across like you are going to walk if you don't get it you'll have little to no chance.

All you will be doing is reducing the agents cut as well. the client won't pay more as you are doing the same work. in theory the agent has made his expect money and there is no extra time and cost for the extension so it's free money. He should be willing to drop his margin a little. That is if he isn't on a fixed margin or a very low one. As a newbie you can almost guarantee he's had your pants down so could be possible.

[Braba]

Thanks for all the replies.

I've worked it out to be at least £1000 more a month and that's including pension and insurance. It's my first contract and they are willing to wait 4 weeks in regards to my notice period, which not many companies do.

It's a software developer role in Berkshire.

However, you are right. £300 is the lower end. It's a 4 - 6 month contract and hopefully once I finish or renew the contract I can find/negotiate a higher rate or different contract.

Is it possible to negotiate a higher rate on contract renewal? Has anyone experience with that?

[TheFaQQer]

You make an extra £17k take home. (See above)

But no pension and bigger risk.

My pension has significantly more in it as a contractor than it ever did as a permie.

[PurpleGorilla]

But £400 pd would work nicely compared to 40k p.a.

You make an extra £17k take home. (See above)

But no pension and bigger risk.

[northernladyuk]

I know I did, I was suggesting to stick to permie until you can break into £450 a day.

But £400 pd would work nicely compared to 40k p.a.