Reply to: Biting The Bullet

[mjcp]

I ended up turning this down, and taking an extension. Been offered £80k now. Seems to be well above permie market rates.... The thing holding me back is that they are definitely going to be hiring more contractors in the near future, so its more than likely I'll be extended. Obviously the permie role is more than likely to have been filled though so that won't be an option anymore..

Anyone else hate making decisions?

I did, I still do and I'm sure I will...

Break it down:

I had 2 offers in march: an inside/umbrella role with a 50 mile each way commute (that post lockdown would be WFH) vs a fully WFH 18 month agency PAYE gig.

£50 /day between them which reduced to about £20 in real terms after tax and commute costs factored in (though travel, would have been moot if I'd known we'd be locked down)

Beyond money, the next question was longevity: 3 months initial contract with probable extensions to 9-12 months vs 18 months "known" at the outset. I went 18 months as I saw a recession on the cards.

Lastly was CV - which one would get me the most interviews for the next gig? both large businesses, but one you won't have a clue about, the other, *everyone* knows.

If you have the flexibility (you can live on the £££) to consider the permie role, then given the likely market for the next 18 months... go with the one that fits your comfort to risk on point 2 and helps you best with point 3...

M

[fidot]

Yep.

The trick is to stop second guessing everything and, in the absence of information, go with what feels right - for you and you only. Don't beat yourself up if it doesn't pan out by obsessively going over every option you had at the time you made your decision as you'll invariably discover with hindsight things you didn't know at the time and you'll end up feeling awful for no good reason.

Absolutely this. Once a decision is made, you lose the opportunity to discover how the other decision would have panned out. So, make a decision based on what you know/feel now, don't look back and work towards making the best of your decision.

[elsergiovolador]

If you make a wrong decision, take it as a learning cost and experience. Next time it will be better.

[ladymuck]

Anyone else hate making decisions?

Yep.

The trick is to stop second guessing everything and, in the absence of information, go with what feels right - for you and you only. Don't beat yourself up if it doesn't pan out by obsessively going over every option you had at the time you made your decision as you'll invariably discover with hindsight things you didn't know at the time and you'll end up feeling awful for no good reason.

[l35kee]

I ended up turning this down, and taking an extension. Been offered £80k now. Seems to be well above permie market rates.... The thing holding me back is that they are definitely going to be hiring more contractors in the near future, so its more than likely I'll be extended. Obviously the permie role is more than likely to have been filled though so that won't be an option anymore..

Anyone else hate making decisions?

[Old Greg]

Nope, you're the one who trolled in, Dan, Manc and me all gave similar figures and said that yours were roughly double the net difference. Since then you've just kept on trolling.

What if it's not trolling?

[WTFH]

Paralytic, I do understand that most contractors have knowledge on how it works, the triggering tipping point was successfully trolled-in by vwdan with 20K+ difference in net financial result..

Yes, I'm already on "page 23" of it, will see what happens once I finish it and try new dummy skills in accounting branch of this forum..

Nope, you're the one who trolled in, Dan, Manc and me all gave similar figures and said that yours were roughly double the net difference. Since then you've just kept on trolling.

[Yuri F]

Paralytic, I do understand that most contractors have knowledge on how it works, the triggering tipping point was successfully trolled-in by vwdan with 20K+ difference in net financial result..

Yes, I'm already on "page 23" of it, will see what happens once I finish it and try new dummy skills in accounting branch of this forum..

[Paralytic]

I think someone has just got a new book for their birthday



Yuri, you're not really telling anyone here anything they don't already know. You're just saying it in more words that don't make sense.

[Yuri F]

not really just me - most of professionals I'm in long business contact with do the same, I've asked this question about 10 years ago and from those who shared some info - was initially a bit surprised why they limit the pay, understanding came with first SA.. You're saying ..20+yrs contracting.., but it's your business how to run it, taxation is merely distributive system deciding/allocating between who earns it and who spends it, I totally support your charity decision, they definitely should know better how to spend it.

have everyone fully topped up isas already this year and sipps last?

[WTFH]

P.S. in short - difference is in instead of asking question "how to pay?" focus for efficiency is on "when to pay?"..
simples.

Not quite.

The difference is between the figures most people use calculate things and how you do.

[Yuri F]

P.S. in short - difference is in instead of asking question "how to pay?" focus for efficiency should be on "when to pay?" (and in a way - how much)..

that's why we do have all this hassle every year with last moment dividend payments in march/first week of april - to efficiently balance tax bands.

simples.

[Old Greg]

Jesus Christ.

It's fascinating, in a way.

[vwdan]

Jesus Christ.

[Yuri F]

[QUOTE=vwdan;2760459]Why don't you write it down in a format that we can actually understand, then? Given near enough everybody here runs a Ltd Co, knows how much they make per day and knows how much they take home does it not occur to you for a second that either you're wrong, or there's some misunderstanding here?

We 're discussing/debating my calcs vs yours in HMRC rates domain, not somebody else (whatever their wrongs are)

Answer was given to you from very beginning:

...I've taken 252 working days in 2020, you're referring to 240, 10 days is not a big difference anyway
(I thankfully don't get sick, not really taking holidays in classical sense but some breaks between contracts are inevitable).
the only thing here - take home (salary of say £14K, rest - dividends) with 252 working days year (gross revenues of £136K incl. VAT) will land you on £88.7K net (the rest on taxes: £20K VAT, £1.3K NI {both ends}, Salary IT £180, £19K CT, £1K exp. {incl. insurance}, £6K div{tax}/CGT {not in one go, spread across professional activity/pension years for efficiency, earning income as investment while sitting in Ltd acc.}, £46.3K on taxes in total)...

My question was where is a deviation (with many here running Co/Ltd-s and being accountants?) between my and your calculations? What tax category you disagree with?

Because pointers are everywhere: intertemporal transfer, dividend allocation, tax bands, additionally for more clarity I can bring in "retained earnings" and from your calculator link "I split the dividend and receive"


while CT should be paid from annual profit, dividend tax (income tax) doesn't have to, simply (as already stated before) because nobody in right mind would cross £50K (this year) tax band (from 7.5% into 32.5%, therefore voluntary paying extra 25 percentage points) without being really desperate (for some urgent reasons, whatever these are), stock market doesn't provide such high return on average to compensate this huge voluntary loss (and I'm not talking about outlier-profits from investments this March/April, because of a bottom&recovery nature of it)
I do expect my professional abilities and income to fall in my 50s and situation will deteriorate even worse in my 60s, but efficient tax band and dividend flow from retained earning will keep coming despite being out of work, for instance I have a freedom not to work (poor market situation) for a year right now - while still getting my £50K (from retained earnings)..
In economics (as already mentioned on first pages) - this is called intertemporal transfer of income if I remember correctly, as contractors/business we do have this advantage over perm employees (although they have something similar - called pension, with matching, etc.)
And guess what? Retained earning can be invested and earn returns too..

As already pointed out - it's all just simple first-grade math covered by basic finance/business-studies course in any uni..

Geesh, these are basic things!!! what's wrong with you guys?

As for remarks by others about so many running companies that's why majority is right ... well I've seen it so many times all around, even though in professional life we have to follow the rules (at least pretend to agree) - but in reality I never accepted this dogma as granted, without testing hypothesis first..
so many companies I was with were on a stone-age level with this approach following common beliefs.
But tbh - I'm happy with this, that's why I'm hired, to change/improve/transform many things caused by such culture..