Reply to: 650 FTC is more or less than 650 inside IR35

[eek]

I chose my own Umbrella (Clarity) who were excellent - the Agents were disorganised and useless.

Shall we just say that getting on a agency’s PSL often requires subbing workers money to hide an agency’s incompetency.

[Peoplesoft bloke]

I chose my own Umbrella (Clarity) who were excellent - the Agents were disorganised and useless.

[eek]

Having just finished an inside Ir35 gig - the perk of FTC for me would be getting paid on time without a lot of faffing about.
Umbrella co were excellent at coughing up once paid but Agent kept claiming not have had invoices/timesheets etc etc - they also tried to get me to agree to 30 day terms (so 60 days to first payment). It was all hassle I don't need - ironically I never had issues getting paid on time when I had my limited co.

Sounds like a typical agent to me - was your umbrella on their PSL or someone else.

[Peoplesoft bloke]

Thanks for the reply. What are the perks then? My holiday is taken out of my salary, I'm not paid for it, i'm micromanaged. I don't see any perks anywhere. Just seems like an even worse version of ir35

Having just finished an inside Ir35 gig - the perk of FTC for me would be getting paid on time without a lot of faffing about.
Umbrella co were excellent at coughing up once paid but Agent kept claiming not have had invoices/timesheets etc etc - they also tried to get me to agree to 30 day terms (so 60 days to first payment). It was all hassle I don't need - ironically I never had issues getting paid on time when I had my limited co.

[sadkingbilly]

This is why I post the same tedious rubbish time after time

FTFY

[hobnob]

For employer it can be cheaper to pay exactly the same amount as FTC than invoice because may not need to pay VAT.

I don't see that being an issue. If the employer is VAT registered then it makes no difference whether they pay the VAT to your company (and your company gives it to HMRC) or whether they pay that VAT to HMRC directly, i.e. it won't cost them anything extra.

Bear in mind that any company with a turnover of £85,000 or higher must be VAT registered. In this example, they'd be paying double that just for the 12 month FTC, and presumably they have other employees as well.

[Protagoras]

Just to double check : In order to achieve 3.3 pension and 6K after NI / income tax you would need a PAYE salary of 160K.

To clarify, my estimate was from the perspective of someone being paid on a contracted worker basis (day rate * days worked) via an umbrella company. The £6k was net of employer and employee NI, apprentice levy and estimated umbrella margin.
It was not stated to be net of PAYE tax.

"In rough numbers, that's £3.3k pension, and £6k salary after NI etc., out of which you then pay PAYE taxes!"

[WTFH]

My company pays 3% pension and has 25 days holiday. Sickness I have never taken advantage of, no seniority and termination happens just like any other employment when money dries up

Oh dear, that’s not very good.
Medical industry pensions are 3x or more of your pension.
Most companies have holidays + stats, i.e. you say 25, that’s actually 32 days.
”Sickness” isn’t something you “take advantage of”, it’s there if you get sick.
As for you never getting promoted and not learning anything from training, that’s not really anyone else’s fault but you.

Please don’t judge everyone else on how you live, but at least you are joyful earning what you earn, even if your every post on here is coming up with daily rate = permanent salary, while ignoring all the nuances.

[NowPermOutsideUK]

Employee benefits ...

- Pension scheme, potentially with salary sacrifice
- Paid holidays
- Paid sickness
- Opportunity to apply for more senior roles with employer, which would not be otherwise available
- Not likely to get terminated with no notice

I'm not quite sure that the option of a salaried FTC is on the table along with a day-rate option... or have I misunderstood this point ?

Using my own umbrella model by way of example.
Say, £650/day, 17 days worked in a given month with 30% of gross to salary sacrifice pension. In rough numbers, that's £3.3k pension, and £6k salary after NI etc., out of which you then pay PAYE taxes! This assumes 'rolled-up' holiday pay which is not technically allowed!

I'd suggest getting an illustration from an Umbrella company to reflect your own working pattern and pension contributions.

Just to double check : In order to achieve 3.3 pension and 6K after NI / income tax you would need a PAYE salary of 160K. I do not know many roles paying that. My company pays 3% pension and has 25 days holiday. Sickness I have never taken advantage of, no seniority and termination happens just like any other employment when money dries up

This is why I follow these threads so joyfully

[malvolio]

Employee benefits ...

- Pension scheme, potentially with salary sacrifice
- Paid holidays
- Paid sickness
- Opportunity to apply for more senior roles with employer, which would not be otherwise available
- Not likely to get terminated with no notice

I'm not quite sure that the option of a salaried FTC is on the table along with a day-rate option... or have I misunderstood this point ?

Using my own umbrella model by way of example.
Say, £650/day, 17 days worked in a given month with 30% of gross to salary sacrifice pension. In rough numbers, that's £3.3k pension, and £6k salary after NI etc., out of which you then pay PAYE taxes! This assumes 'rolled-up' holiday pay which is not technically allowed!

I'd suggest getting an illustration from an Umbrella company to reflect your own working pattern and pension contributions.

Like I said, on that basis the salary will be calculated on 650 x number of working days in the contract, assuming that 650 is not an agency fantasy. The gross salary on offer will be that number annualised and then halved to cover employer overheads. What you get paid is that number for the duration so six months gig you halve it again. Then extract PAYE and EeNICs.

Not quite so attractive now is it....?

[Protagoras]

What are the perks then?

Employee benefits ...

- Pension scheme, potentially with salary sacrifice
- Paid holidays
- Paid sickness
- Opportunity to apply for more senior roles with employer, which would not be otherwise available
- Not likely to get terminated with no notice

I'm not quite sure that the option of a salaried FTC is on the table along with a day-rate option... or have I misunderstood this point ?

Using my own umbrella model by way of example.
Say, £650/day, 17 days worked in a given month with 30% of gross to salary sacrifice pension. In rough numbers, that's £3.3k pension, and £6k salary after NI etc., out of which you then pay PAYE taxes! This assumes 'rolled-up' holiday pay which is not technically allowed!

I'd suggest getting an illustration from an Umbrella company to reflect your own working pattern and pension contributions.

[fabios]

Jeebs thats so crap, let me confirm, if that's the case I wouldn't have even bothered applying let alone interviewing. Thanks a lot.

The devil is in the details. For employer it can be cheaper to pay exactly the same amount as FTC than invoice because may not need to pay VAT. If it's exactly like for like (your ftc is = number of WORKING days * 650 less employers costs less pension) then you are loosing flexibility of deciding about putting less money in pension. On the other hand they may pay 100% sick leave for the first six months from day 1 .

[gables]

Hmm, I'm a bit confused I suppose as I've only seen FTCs advertised with a salary so easy to find out net pay. An advert quoting as a day rate is wrong surely, imagine a "normal" permie role being advertised this way :-)

[picklerick]

It's not net, it's the gross equivalent; somewhere around £50-60k a year. You'll get to keep about 50% of that. Make sure you gt the numbers nailed down before you decide what to do.

Jeebs thats so crap, let me confirm, if that's the case I wouldn't have even bothered applying let alone interviewing. Thanks a lot.

[malvolio]

350/400 net per day after tax would be absolutely fine with me. It would be the equivalent of a 6 figure salary, in theory actually it works out to be more than 650 inside ir35? Thanks though I'll focus on confirming my actual salary rather than the day rate.

It's not net, it's the gross equivalent; somewhere around £50-60k a year. You'll get to keep about 50% of that. Make sure you gt the numbers nailed down before you decide what to do.