Reply to: 'Accidental' contracor seeking umbrella

[ABB]

Just to update, I did find a couple that can accept and
bill in US$, one of whom could not insure the contract
('anywhere except US'), the other can do everything bar
PII, so I'll need to get that separately.

I was quite surprised at how many could not cope at all,
and one that gave me the hard sell about setting up as a
Ltd co, on the grounds that I was working from home and thus
outside IR35, and could play all the tax games.

Frankly, I don't need the hassle right now, but may go that
route later as a higher proportion of my rate would land in
my pocket.

ABB

[DiscoStu]

You also need to consider how tax efficient the Umbrella Company you're planning to use. Have you looked at all the options?
In terms of the currency: in my experience they will generally pay you based on currency rate at the date of payment.

How can one umbrella be more tax efficient than another? Unless you're using an offshore or dodgy loan scheme all umbrellas operate under the exact same tax rules.

[ABB]

@YasmineHugeiIII
Yes, I think that's the best I can hope for, rather than some arbitrary
rate set by the Umbrella for the duration of the contract.
I can't see any way to mitigate the currency problem.
If I price my labour in Sterling,then the client has a variable cost,
if I price it in dollars, then I have variable income.
Depending on the movements, I will get more or less expensive,
or more or less cash in the bank. Hohum.

For tax, I expect I'll be hit with the full IR35 monty

ABB

[YasminHuegilll]

You also need to consider how tax efficient the Umbrella Company you're planning to use. Have you looked at all the options?
In terms of the currency: in my experience they will generally pay you based on currency rate at the date of payment.

[ABB]

These costs are very low. Besides which, there are rules on how much you can claim anyway and the limits are not that high. And on top of that, your costs working from home are about the same as your costs being unemployed.

Yup - what he said.
ABB

[d000hg]

So your PC runs on fresh air? Working from home incurrs costs just as working from a client's premises does.

When working from home you need to factor in increases to your household energy bills. Having your PC on all day, your telephone bill (especially if your client is based in the sates), heating and lighting for the room you will be using. You may find that these fuel bills rise and with the fuel companies already warning us that they are to put up their prices next year you may have a nasty surprise when your electricity and gas bills start dropping through the door.

These costs are very low. Besides which, there are rules on how much you can claim anyway and the limits are not that high. And on top of that, your costs working from home are about the same as your costs being unemployed.

[MPwannadecentincome]

not all umbrellas will be able to invoice in foreign currencies.
not all umbrellas will provide insurance cover for the USA, may not be an issue if you do not go there but you have to ask them what the situation is.

in the current economic climate you may want to consider fixing a rate in pounds based on the exchange rate now. Yes there is the possibility you could get more in pounds as the pound continues to weaken, on the other hand it may or may not go down much further before it goes up again in the future.

[Scotchpie]

I doubt there will be any, as I'll be working from home

So your PC runs on fresh air? Working from home incurrs costs just as working from a client's premises does.

When working from home you need to factor in increases to your household energy bills. Having your PC on all day, your telephone bill (especially if your client is based in the sates), heating and lighting for the room you will be using. You may find that these fuel bills rise and with the fuel companies already warning us that they are to put up their prices next year you may have a nasty surprise when your electricity and gas bills start dropping through the door.

As this is to be your one and only contract, you will not be able to claim for these expences and so you may want to reconsider your basic hourly/daily rate to cover yourself.

[ABB]

I doubt there will be any, as I'll be working from home

[Beefy198]

I would also be tempted to increase it slightly because as you do not intend to be a contractor for long, you may not be able to claim all your expenses.

Or any at all if you're only going to do one contract.

[Scotchpie]

Thanks for the link. To be honest I still use a pen and paper to work out my rate using the method I mentioned above but from a quick test just now it seems pretty acurate.

I would also be tempted to increase it slightly because as you do not intend to be a contractor for long, you may not be able to claim all your expenses.

[ABB]

I have never used a brolly but my take would be:

Oracle slave, thanks for that answer, I'll be calling a few to see
what the score is, but at least you confirmed that this is within
the realm of viability.
ABB

[ABB]

Well I used this one
One might surmise it either generates a random number, or
at least attempts to incorporate some of the things you mention
above.
Do you know of a better one?
ABB

[thunderlizard]

well, that depends on how sophisticated his rate calculator was.

[Scotchpie]

...and used a suitable
figure based on my last salary as suggested by a rate calculator.
ABB

You haven't really thought this through have you? If you are basing your contractor rate on your past salary you will be severly out of pocket. Remember, contractors don't receive holiday or sick pay. We also have to pay employer's NI as well as employee's, and we pay the Umbrella for their services.

You should really be looking at a figure that is double your salary or alternatively work out all your costs, include 4/5 weeks holiday (when you will not receive any pay) and perhaps a week or two for sickness and then base your rate on that.