Converting permanent salary to sole trader day rate?

[NotAllThere]

If you're a sole trader, then you're not going through an agency (intermediary) so cannot be affected by IR35 (intermediary's legislation). See Qdos explanation here. What you have to be concerned about is whether you are not self-employed, but actually an employee - but it's the employer who has the liability.

[northernladuk]

But they aren't equal choices. You wouldn't compare in/out AND sole trader. You are either in or out. In your case you won't be outside.

So you need either a brolly or sole trader calculator. Might be hard because you'll have to look at two websites.


Third result from a search for sole trader take home pay

[PickledFishNChips]

I have yes, and spent all day searching this forum and others, and despite seeing you chastise people for foolishly neglecting to read the newbie guides I gave it a go

I've found this which suggests 25% so if I consider that accurate I can compare to the calculators for Inside/outside IR35 and compare

There just doesn't seem to be a calculator that lets you switch between all 3 options of Inside/Outside IR35 and sole trader

[northernladuk]

Have you tried typing something like sole trader take home pay in to Google?

[northernladuk]

Sorry yes, good point, there is an uplift for those:

253 working days after weekends

- 25 holiday

= 228

40,000/228 = 175 per day


So it's an uplift for the gross salary

but I'm stuck on what the take home will be as a sole trader

But no pension, no sick pay, no training, no yearly wage increase and there must surely be other benefits gone for 3.5k extra a year?

[PickledFishNChips]

Sorry yes, good point, there is an uplift for those:

253 working days after weekends

- 25 holiday

= 228

40,000/228 = 175 per day


So it's an uplift for the gross salary

but I'm stuck on what the take home will be as a sole trader

[northernladuk]

So no more pension, holidays, sick and rights for the same money??

[PickledFishNChips]

My apologies

I was on 40k - so the day rate I'm told is equivalent

But that only seems to be true if I were invoicing through an intermediary, and outside IR35

If I were inside IR35, the equivalent salary would actually be lower and I'm in effect getting a significant pay cut

As a sole trader, I'm not sure!

[malvolio]

Conventional wisdom is that £40k salary is about £40 an hour outside IR35...

[northernladuk]

Is that a lot more than you were on? Doesn't seem much to give up your perm benefits for.

[PickledFishNChips]

Hi all,

I've been offered a day rate of £191 to equate to a permanent salary of £40,000


This seems to match what the calculators are saying, if I were OUTSIDE IR35. But I have moved from permanent to contractor for the same country, I would definitely be within IR35, if I were charging via an intermediary.

I'm actually working as a sole trader. I can't find any calculators that deal with this as it's so uncommon.

Can anyone please advise?

Thank you