Reply to: umbrella or LTD

[GregRickshaw]

Oooooookay.... lets not go that far. That last comment is pretty ridiculous. You had the option to go umbrella any time you wanted. You didn;t need to go inside to use a brolly.

Ok agreed on the IR35 I'm not glad it was enforced, it's been bad for more than it's been good so I apologise.

I didn't have to be inside where I am now, I just chose umbrella. After years of stupid mistakes which wouldn't have happened had I been in an Umbrella, I was glad of someone to force me to adapt and use inside rules and to just have stability again.

[northernladuk]

Relaxed is definitely the word, I spent so much time worrying about SA it was really not worth earning any extra. It will restrict me to locations I can work in eventually again though I was probably travelling too much anyway.

For me just all round better option. I'm actually glad of IR35.

Oooooookay.... lets not go that far. That last comment is pretty ridiculous. You had the option to go umbrella any time you wanted. You didn;t need to go inside to use a brolly.

[GregRickshaw]

Funny but I was a lot more relaxed when I was with an umbrella on an increased rate as well. Felt like I was loaded with all the money coming in monthly rather than just disappearing in to the Ltd bank.

Relaxed is definitely the word, I spent so much time worrying about SA it was really not worth earning any extra. It will restrict me to locations I can work in eventually again though I was probably travelling too much anyway.

For me just all round better option. I'm actually glad of IR35.

[northernladuk]

I recently switched back to Umbrella after nearly 11 years as LTD and it feels like the best thing I ever did.

No more CT, VAT, NI, SA problems etc.,

I seem to have not lost revenue really as I did manage to push up my daily rate. Not sure how things will be once more normality returns however, re: expenses and travel but for now it's the best thing I have done in many a long time and at a certain point in your life money becomes the least of your worries.

Funny but I was a lot more relaxed when I was with an umbrella on an increased rate as well. Felt like I was loaded with all the money coming in monthly rather than just disappearing in to the Ltd bank.

[GregRickshaw]

Switched to Umbrella after 11 years

I recently switched back to Umbrella after nearly 11 years as LTD and it feels like the best thing I ever did.

No more CT, VAT, NI, SA problems etc.,

I seem to have not lost revenue really as I did manage to push up my daily rate. Not sure how things will be once more normality returns however, re: expenses and travel but for now it's the best thing I have done in many a long time and at a certain point in your life money becomes the least of your worries.

[edison]

At a very senior level, Interim roles (e.g Interim CIO) can make sense financially compared to permie equivalent, and are likely to be inside IR35. Not my bag, though.

Interim CIOs (and any other senior interim manager) tend to be brought in to fix a specific problem or problems or sometimes the incumbent left at short notice. I think it's less likely that companies would be so worried about the potential difference in cost between an interim and permie CIO. At that level, it's more important to get the hire right as the cost of getting it wrong can theoretically be hundreds of thousands or millions of pounds.

As a comparison, a FTSE 250 or equivalent CIO day rate would be typically in the £1000-1400 day rate range. Base salary would be at least £150k, package could be up to that again. Cost to hire a perm CIO could be 30% of total first year salary plus package.

It could take up to a year to find the right perm CIO but you wouldn't really want to have an interim for more than say 18 months. Interims don't tend to be focused so much on ongoing leadership to develop the organisation and that's what you need long term.

I know quite a lot of CIOs who are currently on the bench...

[Old Greg]

I can see a pattern. You might as well vote Labour now if you are going to end up in a tulipty low pay permie job.

Can't you just be happy for us, rather than always trying to drag you down to your own level?

[LondonManc]

I can see a pattern. You might as well vote Labour now if you are going to end up living on the dole working in the grey market economy.

FTFY

Perhaps Ayn Rand was right after all!

[DimPrawn]

I can see a pattern. You might as well vote Labour now if you are going to end up in a tulipty low pay permie job.

[Peoplesoft bloke]

Generally, employees can only claim unfair dismissal against an employer if they have a minimum of two years' service. In 2012, the qualifying period increased from one to two years.

Interesting it was the LibCon coalition that made it two years instead of one, eroding employee rights further, and making it easier to hire and fire people with little recourse.

Remember that fact and IR35 to the public and private sector come election time.

The length of time before being able to claim unfair dismissal has been a political football for years -

The right to claim unfair dismissal was introduced by the Industrial Relations Act 1971. At that time the qualifying period was two years.(Tories)

It has changed many times since, ranging between six months and two years.

The Trade Union and Labour Relations Act 1974 reduced the period to six months, following a (six month) transition period in which it was one year (Labour)

The Unfair Dismissal (Variation of Qualifying Period) Order 1979(SI 1979/959) increased it to one year (Tories)

The Employment Act 1980 increased it to two years for employees in firms with fewer than 21 employees (Tories)

The Unfair Dismissal (Variation of Qualifying Period) Order 1985(SI 1985/82) increased it to two years in all cases (Tories)

The Unfair Dismissal and Statement of Reasons for Dismissal(Variation of Qualifying Period) Order 1999 (SI 1999/1436)lowered it to six months (Labour - can you see a pattern here?)

The Unfair Dismissal and Statement of Reasons for Dismissal(Variation of Qualifying Period) Order 2012 (SI 2012/989)increased it to two years (Tories and Lib Dem)

[DimPrawn]

Thats nonsense. Unless you have large commuting costs your gross income is still normally 40% higher as a contractor. If its inside IR35 how is permanent better? permanent is like inside IR35 in terms of taxes. What rights do you have as an employee anyway? U can always be sacked before a period of two years.

Generally, employees can only claim unfair dismissal against an employer if they have a minimum of two years' service. In 2012, the qualifying period increased from one to two years.

Interesting it was the LibCon coalition that made it two years instead of one, eroding employee rights further, and making it easier to hire and fire people with little recourse.

Remember that fact and IR35 to the public and private sector come election time.

[Peoplesoft bloke]

Ok if the client thought they could pay less for your skills, why they didn't replace you earlier?

Are you being deliberately obtuse?

The IR35 changes meant clients (not just the one I was at but many others) decided that the easiest way to operate was by assuming everyone was inside IR35 - and their interpretation of this was either a PSC ban or declaring all contracts inside and offering them on that basis with no increases.

Are you an actual contractor or do you just hang around here distributing "wisdom"?

[Old Greg]

I suppose a client could theoretically pay enough to offset the impact - but it wouldn't make any financial sense for them as they'd be paying way more than the total cost of a fixed term PAYE employee.

At a very senior level, Interim roles (e.g Interim CIO) can make sense financially compared to permie equivalent, and are likely to be inside IR35. Not my bag, though.

[elsergiovolador]

Maybe you have some magically rare skillset - I don't - no clients, not one were offering a penny more on rates to work inside in the run up to the original revision of IR35 in Jan/Feb/Mar - in fact most were demanding a rate cut so they could use the difference to pay their employers NI and apprentice levy.

Ok if the client thought they could pay less for your skills, why they didn't replace you earlier? It looks like they may know you have no alternative and so they can drag the rate down. It's a question how quickly they could find a replacement and how much time would get that company to get up to speed?

[perplexed]

Probably in a different situation to most in that I don't stay away from home - child with special needs, wife with long term illness - but my approach these days is a priority based list.

1) Outside IR35 via limited
2) If no outside IR35, then make company dormant and lookk for Inside Ir35 gigs via umbrella