Reply to: Crossroads

[wantacontract]

so despite all the working out of the figures etc......at the end I was ruled by how I feel...which is the important factor in the end to me.....

[wantacontract]

well after stepping into the buildings for both companies, all thought of going to permiedom went out the window. I knew straight away I could not work there for the next x amount of years......trudging up the same set of steps everyday...

My head was saying yes, but heart said no....

so going to contract til I give it up or until a dream permie job comes up....

[wantacontract]

In my defence, the OP did make the initial comparison but basically he wants to know if he should contract or go permie, not sure I helped

gables you did help.....

will provide a ending to this tale in two weeks time....

[gables]

IDI

IDI??

[gables]

Why compare an annual salary with 10 months of contracting. It makes no sense. OP, if you are on £350+ a day you will kick the tulip out of a permie job.

I think he's realised that, using 10 months versus 12

[northernladuk]

In my defence, the OP did make the initial comparison but basically he wants to know if he should contract or go permie, not sure I helped

IDI

[PurpleGorilla]

Why compare an annual salary with 10 months of contracting. It makes no sense. OP, if you are on £350+ a day you will kick the tulip out of a permie job.

[gables]

I've forgotten what we were trying to achieve after all these re-iterations of numbers that aren't really comparable anyway.

In my defence, the OP did make the initial comparison but basically he wants to know if he should contract or go permie, not sure I helped

[northernladuk]

I've forgotten what we were trying to achieve after all these re-iterations of numbers that aren't really comparable anyway.

[gables]

Sorry gables I still don't agree with your calculations. They seem to be off my tens of thousands. Have you tried working it out manually from scratch, rather than relying on an internet web page? If your calcs were true, it is unlikely that any contract market would exist.

Okey dokey, here we go, trying manually using HMRC guidance and HMRC spreadsheet, and keeping it as simple as possible, so no clever dickery with 'expenses' just the 5% allowed:

£350/day for 44 weeks = £77,000 turnover

5% unspecified expenses = £3850 (spent on accountant, etc) leaves £73150 from which to renumerate

Let's pay a gross salary of £65260 which attracts employer's NIC of £7886.42 = total = £76996.42 this leaves a deemed payment of £3.58, so we've paid as much as possible via PAYE

Salary of £65260 = £3764.71 /month net = £45176.52/year net

Which compares with a permie £45kgross/year netting £2785.48/month and £33425.47/year


Hopefully that's correct??

[unixman]

Sorry gables I still don't agree with your calculations. They seem to be off my tens of thousands. Have you tried working it out manually from scratch, rather than relying on an internet web page? If your calcs were true, it is unlikely that any contract market would exist.

[gables]

right guys, I've realised where I've gone wrong...

I had another look at the detailed breakdown this time rather then just taking the figure of £3442 (derived from £350 day rate) and times that by 10 (10 months, 1 month for holiday and 1 month for looking for a contract)

After looking at the break down, £3442 actually accounts for 44 weeks, which means 6 weeks off per year, plus £6000 in expenses. So provided I only take 3 weeks holiday and have 3 weeks bench time per year, I would be better off by 7k per year.

Permie @ 46k = £34k net
contractor @ £350 per day = £41304. (inside ir35)

so now the question is = does 7k compute against the risk of longer bench time & defacto permie land offer 25 days of holidays, so I am short changing myself by 2 weeks.

Only you can answer that, and as pointed out earlier by others, it's not just about money.

[wantacontract]

Don't forget your slice of the VAT if you're on the flat rate VAT scheme. That's just over £ 1k based on the above figures.

good call.....

[wantacontract]

right guys, I've realised where I've gone wrong...

I had another look at the detailed breakdown this time rather then just taking the figure of £3442 (derived from £350 day rate) and times that by 10 (10 months, 1 month for holiday and 1 month for looking for a contract)

After looking at the break down, £3442 actually accounts for 44 weeks, which means 8 weeks off per year, plus £6000 in expenses. So provided I only take 4 weeks holiday and have 4 weeks bench time per year, I would be better off by 7k per year.

Permie @ 46k = £34k net
contractor @ £350 per day = £41304. (inside ir35)

so now the question is = does 7k compute against the risk of longer bench time & defacto permie land offer 25 days of holidays.

[wantacontract]

Remember that this is only when you actually have a contract!

More than a few people on here have been blindsided by unexpected bench time or, even worse, found their skills in vastly reduced demand because the market shifted over the course of a year or so.

I am not trying to talk you out of anything, I am just trying to make sure the numbers do not go to your head.

yes totally understand that......

I have been lucky over the last 10 years that I have had little bench time, what bench I've had its been by choice, apart from 2 months...so overall from a 10 year run, 2 months of enforced bench time is pretty damn good...but I can definitely see a change coming....