Reply to: April off payroll

[ladymuck]

An update following meetings with my client.

I provided them with evidence (QDOS) that our contract was outside IR35 and they have accepted this.

I told them that I would have to leave if they made any other determinations other than outside IR35 and we looked on the off payroll April rules as being a shared problem.

They have stated they want to retain my services and see me as outside IR35 but may want to change some engagement practices to protect themselves.

They do not want me to use their own equipment going forward.

They want me to base myself out of my own office (which I mostly do anyway).

Glad I have an enlightened client...

Great news, now get it all in writing!

[silverlight1]

I have a meeting Monday about my clients plans for contractors in April and would welcome some input from other CUK contractors

1. If Paye is deducted from my invoice what do other forum members feel should be the % uplift in day rate to compensate?

2. Is there any insurance out there to protect my client and I if we jointly agree to stay outside IR35. My contract and working practices are outside But e.g. If hmrc arbitraly decide the contract is inside IR35. I already have IPSE but this would not cover any liability for the client. Is there any insurance I could suggest to my client around this please?

3 in the unlikely event of going perm I reckon I'd be looking at 30% on top of my current day rate - does that sound OK? I don't really see perm as an option though having been a professional contractor for 13 years now

Thanks for any input

An update following meetings with my client.

I provided them with evidence (QDOS) that our contract was outside IR35 and they have accepted this.

I told them that I would have to leave if they made any other determinations other than outside IR35 and we looked on the off payroll April rules as being a shared problem.

They have stated they want to retain my services and see me as outside IR35 but may want to change some engagement practices to protect themselves.

They do not want me to use their own equipment going forward.

They want me to base myself out of my own office (which I mostly do anyway).

Glad I have an enlightened client...

[WTFH]

Not sure if he has UK company or Irish but he is confident he is not affected by this IR35 changes.

If he has an Irish Company as is working in Ireland, then he's not under UK jurisdiction when it comes to tax laws.

[Andy2]

Really? He is working via a UK limited company in Ireland and the Irish taxman hasn't caught him yet. Give them time.

Not sure if he has UK company or Irish but he is confident he is not affected by this IR35 changes.

[eek]

A mate is working through a limited company in ireland. Apparently ir35 like legislation is not there.

Really? He is working via a UK limited company in Ireland and the Irish taxman hasn't caught him yet. Give them time.

[Andy2]

Many other countries have IR35-like legislation, although implemented in a far better way than in the UK.

A mate is working through a limited company in ireland. Apparently ir35 like legislation is not there.

[rogerfederer]

Many other countries have IR35-like legislation, although implemented in a far better way than in the UK.

Let's face it, the reason many of us, our parents or ancestors came to the UK was for better quality and more diverse working options.

If we're stuck with no expenses and paying much higher taxes without the equivalent quality of living (ie: public services, standard of living) then it still makes sense for those able to move to look at Norway, Sweden, Denmark, Netherlands and further afield.

For example in another thread over the weekend someone asked queries about Sweden: yes, higher tax - although not as high as Norway - but higher quality of living than the UK and, depending on what you value doing with your spare time, accessible outdoors and diverse hobby options. If your sole focus is beer then yes, Sweden is more expensive for that, but I'd also suggest you're a bit of a dullard if that's your sole hobby ;-)

[ukltdcon]

I have a meeting Monday about my clients plans for contractors in April and would welcome some input from other CUK contractors

1. If Paye is deducted from my invoice what do other forum members feel should be the % uplift in day rate to compensate?

2. Is there any insurance out there to protect my client and I if we jointly agree to stay outside IR35. My contract and working practices are outside But e.g. If hmrc arbitraly decide the contract is inside IR35. I already have IPSE but this would not cover any liability for the client. Is there any insurance I could suggest to my client around this please?

3 in the unlikely event of going perm I reckon I'd be looking at 30% on top of my current day rate - does that sound OK? I don't really see perm as an option though having been a professional contractor for 13 years now

Thanks for any input

There is insurance my current gig who have around 200 contractors has partnered with a firm to offer just this for outside IR35, contractor will pay around £150 to towards this cost, personally think this is the way forward for contracting, just like our own IR35 insurance most contractors have had for years.

[m0n1k3r]

Take time off, look outside UK. It is not about the money and that is a lesson you learn chasing the first few roles and end up in the wrong place.
Life is not only about work anyway.

Many other countries have IR35-like legislation, although implemented in a far better way than in the UK.

[GigiBronz]

How 4.5k is calculated ? I thought through umbrella co you get 58.58%.

253 working ;25 days off;228 days worked;102600 gross ;88441.2 after employer NICs 13.8% ;77828.256 after empplyee NICs 12% ;12500 tax free ;52262.6048 left ;40000=50k at basic rate20% ;1357.56288 after higher rate40% ;Total: 53857.56 ; about 4.5k pcm.

for umbrella you might have to factor another 25-30£ pw in administration fees, apprenticeships levy, and holidays taken out than repaid when taken(not all accessible upfront.)

I'll mention one scenario only, you have a 1y contact, don't want to pay 30-40% premium for airbnb so take a 6m-12m apartment lease. Get booted 2m in the contract because of budget or manager doesn't like the colour of your shoes. Try to factor this one into the costs.

I strongly recommend the £550-1000/day crowd look abroad until the dust settles.

Take time off, look outside UK. It is not about the money and that is a lesson you learn chasing the first few roles and end up in the wrong place.
Life is not only about work anyway.

[GhostofTarbera]

I took your advice and asked for £700/day,
Now i am jobless and homeless.

Lol


Sent from my iPhone using Contractor UK Forum

[rogerfederer]

I agree with the sentiment.

i would offer that the offshored permie-tractors who took the 10% rate cuts in the ass in repeatedly also led us up to this point.

To be fair businesses have been paying £450/500 for over ten years now as a market rate, seemingly regardless of seniority.

Sink or swim time for both the contractor and the businesses that rely on them or, evolve or die out.

This is what I was also getting at and mentioned in another thread:
Rates have been static for about 15 years. £500/day 15 years ago is £300/day in money today due to inflationary costs.

My original point remains: if you've been earning lots of money for years then you should have a good war chest. Take a few months off, go abroad and keep in touch with foreign opportunities. A few idiots taking £375/day inside - such as a senior program manager role advertised yesterday at RBS in Edinburgh, will ensure the program is so badly damaged that they will eventually turn to the professionals once the dust has settled. If RBS turn to large 'service providers' then this damage also emerges and they'll hopefully employ a better contractor strategy once this is realised.
This m.o applies across most medium to large enterprise clients that most of us have dealt with for a decade or two.

If you've been splurging all your Ltd co income on fast cars, large houses and private schooling then I'm afraid "you did it wrong".

The high quality contractor roles will remain outside IR35 eventually once the banks realise what a big mistake they've made. I admit this process may take until 2021 to finalise but, in the interim, I strongly recommend the £550-1000/day crowd look abroad until the dust settles.

[Bluenose]

The guy above has a point.
If you've been a contractor long enough and have a decent

Market will adapt only if people ask what they think they deserve. On the other hand, it might not be as much of a free market as we would like to think, gov might cut employment rights and stir the rat-race and companies refuse to take on contractors. In that scenario we are f... anyway.

If you have an overstretched mortgage, long apartment lease and can't tighten the belt a bit and get by for a while, that is on you.

I agree with the sentiment.

i would offer that the offshored permie-tractors who took the 10% rate cuts in the ass in repeatedly also led us up to this point.

To be fair businesses have been paying £450/500 for over ten years now as a market rate, seemingly regardless of seniority.

Sink or swim time for both the contractor and the businesses that rely on them or, evolve or die out.

[Kanaiya]

But if you are going for £450pd inside that is about 4.5k net.

How 4.5k is calculated ? I thought through umbrella co you get 58.58%.


Sent from my iPhone using Contractor UK Forum

[GigiBronz]

The guy above has a point.
If you've been a contractor long enough and have a decent warchest you should be able to sit this one out.
But if you are going for £450pd inside that is about 4.5k net.
A modest life outside central London, studio, not eating out, not owning a car will set you back around 2.5k.
If you have a car, would want to go out the occasional weekend, go for a holiday now and then(to get over the miserable time with the client) you'll be around 3.2k at least.
If you are going for the contractor route, deal with all flavours of clients, long hours, no employment rights, potentially some bench time now and then maybe you should be saving more than 24k/year.
But maybe that is just me.
Market will adapt only if people ask what they think they deserve. On the other hand, it might not be as much of a free market as we would like to think, gov might cut employment rights and stir the rat-race and companies refuse to take on contractors. In that scenario we are f... anyway.

If you have an overstretched mortgage, long apartment lease and can't tighten the belt a bit and get by for a while, that is on you.