Reply to: New to contracting - contractors pay higher tax?

[NeverBeenNorthOfTheM25]

Because they are IR35 caught and PAYE.

I wish I was IR35 caught earning a million squid a year.

(what does that work out to on a daily rate?)

[b0redom]

How come it doesnt work like for football managers where they seem to just get paid out in full even if they are sacked a year into a 3 year contract?

Because they are IR35 caught and PAYE.

[NorthWestPerm2Contr]

Actually you are correct. same happened to me, however I just thought I was the exception to the rule ....... 12 month contract, ended after 9 months because the recession particularly hit the industry I was in hard.

So I spose you have a point. Having said that, generally speaking if someone is offered a 12 month contract then the job USUALLY should last for 12 months. Everything in life is a risk, but youre right about the notice period. How come it doesnt work like for football managers where they seem to just get paid out in full even if they are sacked a year into a 3 year contract?

My son is going to become a professional footballer.... whether he likes it or not. Training starts at 18 months

[NeverBeenNorthOfTheM25]

Except that your contract is really only as long as your notice period, or if the client is being really picky they can not offer you any work during the arranged 'notice period'. A lot of noobs make this mistake - me included. I signed up at a lower rate with IBM, commuting 100 miles per day, as it was a 'guarenteed 12 month contract'. In reality, when the project ran out of money 7 months later, all the contractors were terminated with 1 weeks notice.

Actually you are correct. same happened to me, however I just thought I was the exception to the rule ....... 12 month contract, ended after 9 months because the recession particularly hit the industry I was in hard.

So I spose you have a point. Having said that, generally speaking if someone is offered a 12 month contract then the job USUALLY should last for 12 months. Everything in life is a risk, but youre right about the notice period. How come it doesnt work like for football managers where they seem to just get paid out in full even if they are sacked a year into a 3 year contract?

[b0redom]

I would say this though.

I'd rather be locked into a £250 a day contract that lasts for a year, knowing you can plan out your year (re: holidays etc) than take a £300 a day contract for a month, not knowing if its going to keep rolling, not being able to book holidays because you might need to launch straight into your next contract if a suitable one becomes available in case another role doesnt come along for ages.

Except that your contract is really only as long as your notice period, or if the client is being really picky they can not offer you any work during the arranged 'notice period'. A lot of noobs make this mistake - me included. I signed up at a lower rate with IBM, commuting 100 miles per day, as it was a 'guarenteed 12 month contract'. In reality, when the project ran out of money 7 months later, all the contractors were terminated with 1 weeks notice.

[cojak]

F' it ........ you have an answer for everything

I think nowadays its not so bad, I bet last year though things would have been different!!! I remember this time last year there were f all contracts being bandied about. Certainly not in my field anyway and if you had offered me a year at £250 a day I would have snatched your hand off.

Of course - I'm a contractor!!

You've just gotta remember the Contractor's Song, boys...

[NeverBeenNorthOfTheM25]

Quite.



I did that once, and the market picked up and I lost a lot of money because of it.

It didn't half chafe...

And generally most 3 monthers (my minimum) will offer extensions - mine have in the past.

F' it ........ you have an answer for everything

I think nowadays its not so bad, I bet last year though things would have been different!!! I remember this time last year there were f all contracts being bandied about. Certainly not in my field anyway and if you had offered me a year at £250 a day I would have snatched your hand off.

[cojak]

I think you'll find Cojack will point out his statement was talking about just him and his personal situation where he wouldnt take £250 a day unless on a short term basis, not necessarily saying that £250 a day is a bad amount across the board,

Quite.

I

I would say this though.

I'd rather be locked into a £250 a day contract that lasts for a year, knowing you can plan out your year (re: holidays etc) than take a £300 a day contract for a month, not knowing if its going to keep rolling, not being able to book holidays because you might need to launch straight into your next contract if a suitable one becomes available in case another role doesnt come along for ages.

I did that once, and the market picked up and I lost a lot of money because of it.

It didn't half chafe...

And generally most 3 monthers (my minimum) will offer extensions - mine have in the past.

[malvolio]

I think you will find most of us would go for the £60k contract over the £6k one every time...

[NeverBeenNorthOfTheM25]

Fair point. This is usually reflected in the rates though and you also have to ask yourself what you want to earn, what turnover you need to support that, and then you know how many days work you need to do over your year.

I would say, and it is just a personal opinion, is this is going to be a constant concern to you, maybe contracting is not for you?

Nope its not a concern for me at all, I was playing devils advocate with the above example.

But I guess the point Im trying to make is that if I was offered a contract at £250 a day for a year, or £300 a day for a month, then I would have to think carefully about both offers. To me they kind of have equal weighting, I wouldnt just immediately jump for the £300 a day offer as some on here might.

[ratewhore]

I would say this though.

I'd rather be locked into a £250 a day contract that lasts for a year, knowing you can plan out your year (re: holidays etc) than take a £300 a day contract for a month, not knowing if its going to keep rolling, not being able to book holidays because you might need to launch straight into your next contract if a suitable one becomes available in case another role doesnt come along for ages.

A guy on £250 a day will still earn more than a guy on £300 a day if that guy on £300 a day is spending nearly half the time warming the bench.

Fair point. This is usually reflected in the rates though and you also have to ask yourself what you want to earn, what turnover you need to support that, and then you know how many days work you need to do over your year.

I would say, and it is just a personal opinion, is this is going to be a constant concern to you, maybe contracting is not for you?

[NeverBeenNorthOfTheM25]

£250/day is only a crap rate if your cicumstances are different. Starting off at £250/day in the North West for example and you being close to home is pretty good. Being a long-term contractor at that rate and in London would indeed be crap. A lot of perm people including myself come from salaries of less than 30k, so 250/day is a decent enough improvement.

I think you'll find Cojack will point out his statement was talking about just him and his personal situation where he wouldnt take £250 a day unless on a short term basis, not necessarily saying that £250 a day is a bad amount across the board, because everythings relative. If youre a junior web developer breaking into contracting, a long term £250 a day contract is pretty good. If youre a java developer who has worked for a multitude of investment banks, then you would probably laugh in the face of £250 a day.

I would say this though.

I'd rather be locked into a £250 a day contract that lasts for a year, knowing you can plan out your year (re: holidays etc) than take a £300 a day contract for a month, not knowing if its going to keep rolling, not being able to book holidays because you might need to launch straight into your next contract if a suitable one becomes available in case another role doesnt come along for ages.

A guy on £250 a day will still earn more than a guy on £300 a day if that guy on £300 a day is spending nearly half the time warming the bench.

And especially if youre a 'dime a dozen' contractor, as much as many of us would like to believe we are the best of the best, then sometimes the longer term contract at the lower rate is the better option.

[NorthWestPerm2Contr]

It's funny because I'll only take £250pd locally if it's only for 3 months, then I don't get locked into a crap rate.

So you see - it's up to you and your own priorities.

£250/day is only a crap rate if your cicumstances are different. Starting off at £250/day in the North West for example and you being close to home is pretty good. Being a long-term contractor at that rate and in London would indeed be crap. A lot of perm people including myself come from salaries of less than 30k, so 250/day is a decent enough improvement.

[BlasterBates]

Agree with that crap rates are fine as long as you don't lock yourself in, and you can bugger off when times get better.

[cojak]

£250pd locally vs 35k pa locally, I know which one I'd prefer IF of course I can be fairly sure the contract will last 12months at least, and more often than not they do in my experience.

It's funny because I'll only take £250pd locally if it's only for 3 months, then I don't get locked into a crap rate.

So you see - it's up to you and your own priorities.