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Previously on "Working in the public sector? An FAQ about IR35"

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  • boxingbantz
    replied
    Originally posted by SteelyDan View Post
    Thanks for this, just reading through as someone has just called me about an inside IR35 job (never considered one before), so trying to get it clear in my head.
    So, no mileage, no expenses, looks like best option to use brolly (e.g. CU) which has a monthly fee (£95) & they sort everything out, & I need to pay NICs & PAYE.
    So in order to combat some of this I need to get the rate increased & eat humble pie?
    Is that about the size of it?

    Yes.

    Good luck with getting the rate increased...

    Leave a comment:


  • SteelyDan
    replied
    Originally posted by northernladuk View Post
    It's just thinking about the bottom line. It's quite refreshing not having to bother with the rest of the shenanigans for awhile. After a month or so you'll slip in to it.

    The journey is a non issue for me. I live in the hills outside Manchester so even a city center gig is a 40+ minute drive on a clear run and I did 2 years bus and tram which took an hour. I also did a couple of years in Macclesfield and Knutsford which are 1.5 hours. That's almost the minimum for me. You could work some flexibility in once you've nailed the gig and then at the very worst you can find some cheap lodgings for a night or two a week just to recharge mid week. 50 quid just to keep your sanity yet keep 5k+ rolling in isn't a lot.

    I'm on the bench and it's a desert out here at the moment. I'd be snapping this gig up without a second thought. Anything to get you comfortably up to and hopefully past April and then see where the land lies after.

    At worst you've got a notice period and may have to use it.


    Lucy used to run CU and has now started her own so it's going to be more or less the same.


    Yep but it's going to be more depressing if you have to go perm and even more so if you end up doing a long stint on the bench while the arse falls out of the contracting world.
    It's an odd world when 6k a month is depressing . Like you say, it's just a head game now. If you can think of it like a one off, short term, poorly paid gig that's a bit of a pain in the arse it will change. In 8 months to a year you'll be back in the saddle with an outside gig and it'll just be a dim memory.
    As ever, all good points, much appreciated.

    Edit: Forgot to ask how long would it take to get set up with umbrella, & once a gig finishes (say 6 months), do you need to terminate arrangements with them in order to prevent the monthly fee being applied? As mentioned, never used umbrella before so it's all a mystery at the mo.
    Last edited by SteelyDan; 27 November 2019, 09:06.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by SteelyDan View Post
    Cheers...therein lies a slight problem, it's not local it's 60 miles away (120 return) = 1.5 hrs driving one way. Is it a major issue? I don't know; might be doable. It's 6 months.
    I think I maybe need to get my brain wired to thinking in a different way for this, as opposed to like a Ltd. Co.
    It's just thinking about the bottom line. It's quite refreshing not having to bother with the rest of the shenanigans for awhile. After a month or so you'll slip in to it.

    The journey is a non issue for me. I live in the hills outside Manchester so even a city center gig is a 40+ minute drive on a clear run and I did 2 years bus and tram which took an hour. I also did a couple of years in Macclesfield and Knutsford which are 1.5 hours. That's almost the minimum for me. You could work some flexibility in once you've nailed the gig and then at the very worst you can find some cheap lodgings for a night or two a week just to recharge mid week. 50 quid just to keep your sanity yet keep 5k+ rolling in isn't a lot.

    I'm on the bench and it's a desert out here at the moment. I'd be snapping this gig up without a second thought. Anything to get you comfortably up to and hopefully past April and then see where the land lies after.

    At worst you've got a notice period and may have to use it.

    Didn't know about Clarity Umbrella, so I'll have a look at their fee structure.

    Update, found Clarity, fee structure same as other CU (£95)
    Lucy used to run CU and has now started her own so it's going to be more or less the same.
    Crunched some numbers on their calculator using a notional £10k/month (based on £500/day): Depressing:

    Monthly Income
    £10,000.00
    Employer National Insurance
    £1,098.81
    Employment Tax
    £43.81
    Employee National Insurance
    £495.95
    Employee Tax
    £2,462.98
    Total All Tax
    £4,101.55
    Margin
    £95.00
    Total Net Income
    £5,803.45
    Yep but it's going to be more depressing if you have to go perm and even more so if you end up doing a long stint on the bench while the arse falls out of the contracting world.
    It's an odd world when 6k a month is depressing . Like you say, it's just a head game now. If you can think of it like a one off, short term, poorly paid gig that's a bit of a pain in the arse it will change. In 8 months to a year you'll be back in the saddle with an outside gig and it'll just be a dim memory.

    Leave a comment:


  • SteelyDan
    replied
    Originally posted by northernladuk View Post
    I went inside on 500 a day and I've never had so much money! I normally divi most of it out early in the year and spend the rest of the year shifting money around. Inside I got a fat load of cash in the account with no worries. It was, rather oddly, quite satisfying.

    I knew it was only a short term gig so I went with Lucy (now Clarity Umbrella) to make use of her pension option. Idea was to stick it all in there which could have been more tax efficient than a Ltd but wasn't there long enough.

    If the gig is local and the money you get at the end is in your comfort zone then go for it.
    Cheers...therein lies a slight problem, it's not local it's 60 miles away (120 return) = 1.5 hrs driving one way. Is it a major issue? I don't know; might be doable. It's 6 months.
    I think I maybe need to get my brain wired to thinking in a different way for this, as opposed to like a Ltd. Co.
    Didn't know about Clarity Umbrella, so I'll have a look at their fee structure.

    Update, found Clarity, fee structure same as other CU (£95)
    Crunched some numbers on their calculator using a notional £10k/month (based on £500/day): Depressing:

    Monthly Income
    £10,000.00
    Employer National Insurance
    £1,098.81
    Employment Tax
    £43.81
    Employee National Insurance
    £495.95
    Employee Tax
    £2,462.98
    Total All Tax
    £4,101.55
    Margin
    £95.00
    Total Net Income
    £5,803.45
    Last edited by SteelyDan; 26 November 2019, 13:10.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by SteelyDan View Post
    Cheers. I'll dig further with the agency & see where the rate tops out, just wanted to do some research on here beforehand, hence the questions.
    The figures look depressing but, if it went to £500-600 it might be worth considering tho?
    I went inside on 500 a day and I've never had so much money! I normally divi most of it out early in the year and spend the rest of the year shifting money around. Inside I got a fat load of cash in the account with no worries. It was, rather oddly, quite satisfying.

    I knew it was only a short term gig so I went with Lucy (now Clarity Umbrella) to make use of her pension option. Idea was to stick it all in there which could have been more tax efficient than a Ltd but wasn't there long enough.

    If the gig is local and the money you get at the end is in your comfort zone then go for it.

    Leave a comment:


  • SteelyDan
    replied
    Originally posted by GhostofTarbera View Post
    No you need to eat humble pie as majority of clients are not increasing rates (and in this market most are reducing as so many candidates) your £600 a day jobs outside last year are now getting 100’s of good candidates willing to do it for £400 inside IR35

    Pass me the spoon also


    Sent from my iPhone using Contractor UK Forum
    Cheers. I'll dig further with the agency & see where the rate tops out, just wanted to do some research on here beforehand, hence the questions.
    The figures look depressing but, if it went to £500-600 it might be worth considering tho?

    Leave a comment:


  • GhostofTarbera
    replied
    Working in the public sector? An FAQ about IR35

    Originally posted by SteelyDan View Post
    So in order to combat some of this I need to get the rate increased & eat humble pie
    No you need to eat humble pie as majority of clients are not increasing rates (and in this market most are reducing as so many candidates) your £600 a day jobs outside last year are now getting 100’s of good candidates willing to do it for £400 inside IR35

    Pass me the spoon also


    Sent from my iPhone using Contractor UK Forum

    Leave a comment:


  • SteelyDan
    replied
    Thanks for this, just reading through as someone has just called me about an inside IR35 job (never considered one before), so trying to get it clear in my head.
    So, no mileage, no expenses, looks like best option to use brolly (e.g. CU) which has a monthly fee (£95) & they sort everything out, & I need to pay NICs & PAYE.
    So in order to combat some of this I need to get the rate increased & eat humble pie?
    Is that about the size of it?

    Leave a comment:


  • malvolio
    replied
    Originally posted by northernladuk View Post
    I knew I'd get a juicey catch there but you Mal???
    I hate to disappoint...

    We need a reverse whoosh smiley.

    Leave a comment:


  • northernladuk
    replied
    Originally posted by malvolio View Post
    Ermmm… You do realise that is tax evasion...?
    I knew I'd get a juicey catch there but you Mal???

    Leave a comment:


  • Lance
    replied
    Originally posted by malvolio View Post
    Ermmm… You do realise that is tax evasion...?


    Leave a comment:


  • JohntheBike
    replied
    Originally posted by northernladuk View Post
    Correct on all counts. Pension was very good actually although I wasn't there long enough to use it. I was with Contractor Umbrella and their scheme was uncapped so could have put the entire allowed amount in. That would have made the whole gig very tax efficient. I am aware that is pretty unique though. I think they are the only one we've found so far that do that. Others are pretty basic.
    Yes to payslips. Why would you think I wouldn't?

    Actually, the odd thing is it was great, probably down to me fretting about my finances but I felt much better off getting the full amount in my bank every week. No fretting about the warchest, having to do my accounts, sending divis to my mum and girlfriends, no having to go in to their banks to transfer the divis back to me and all sorts. Quite enjoyed it to be fair.
    I know in the long run it isn't efficient but it was a nice change.
    OK, so your particular contract situation was acceptable to you. However, that may not suit everyone. I would welcome being paid a nett amount without the IR35 and Ltd. co. hassle, if that nett amount were to reflect what nett salary and benefits I would have been getting by now if I'd been able to remain in my last permie job.

    However, I've never been offered such a structure and that would be extremely unlikely. My gross contractor income is only roughly the same as I would estimate my salary would have been by now. I was effectively DPM in my last permie job. We don't all enjoy these high daily rates that are bandied about here. So the effective cost to the client is less (and much less than my current client pays for such a role) whilst there are benefits for me.

    When I was incurring travel and subsistence expenses, the only advantage I gained over a permie role, apart from being able to continue earning, was that I could split my contractor income through MyCo between myself and my wife, where she could benefit from using her personal allowance, as she wasn't in gainful employment. This structure suited the clients and myself, but not HMRC obviously. Hence my great hostility to all things IR35. I wasn't subject to the FTM issues as I was made redundant at 49, as part of a controlled shutdown of the employer's activities in the UK. So contracting was my only way to continue earning.

    Leave a comment:


  • malvolio
    replied
    Originally posted by northernladuk View Post
    Correct on all counts. Pension was very good actually although I wasn't there long enough to use it. I was with Contractor Umbrella and their scheme was uncapped so could have put the entire allowed amount in. That would have made the whole gig very tax efficient. I am aware that is pretty unique though. I think they are the only one we've found so far that do that. Others are pretty basic.
    Yes to payslips. Why would you think I wouldn't?

    Actually, the odd thing is it was great, probably down to me fretting about my finances but I felt much better off getting the full amount in my bank every week. No fretting about the warchest, having to do my accounts, sending divis to my mum and girlfriends, no having to go in to their banks to transfer the divis back to me and all sorts. Quite enjoyed it to be fair.
    I know in the long run it isn't efficient but it was a nice change.
    Ermmm… You do realise that is tax evasion...?

    Leave a comment:


  • northernladuk
    replied
    Originally posted by JohntheBike View Post
    so I deduce then that the payments were made to your private bank account and not to you company and that you are effectively an employee of the brolly. So were the holiday, sick pay and pensions contributions attractive? Remember that organisations who have more than 50? employees must now provide for pension payments. Do you receive a payslip?
    Correct on all counts. Pension was very good actually although I wasn't there long enough to use it. I was with Contractor Umbrella and their scheme was uncapped so could have put the entire allowed amount in. That would have made the whole gig very tax efficient. I am aware that is pretty unique though. I think they are the only one we've found so far that do that. Others are pretty basic.
    Yes to payslips. Why would you think I wouldn't?

    Actually, the odd thing is it was great, probably down to me fretting about my finances but I felt much better off getting the full amount in my bank every week. No fretting about the warchest, having to do my accounts, sending divis to my mum and girlfriends, no having to go in to their banks to transfer the divis back to me and all sorts. Quite enjoyed it to be fair.
    I know in the long run it isn't efficient but it was a nice change.
    Last edited by northernladuk; 19 July 2019, 09:50.

    Leave a comment:


  • JohntheBike
    replied
    Originally posted by northernladuk View Post
    The choice was umbrella or agent PAYE. No LTD option on the table. I went brolly and the contractual terms are between agent and brolly. I signed an employment contract with the brolly
    so I deduce then that the payments were made to your private bank account and not to you company and that you are effectively an employee of the brolly. So were the holiday, sick pay and pensions contributions attractive? Remember that organisations who have more than 50? employees must now provide for pension payments. Do you receive a payslip?

    Leave a comment:

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