Reply to: JP Morgan show their hand

[JohntheBike]

You're inside IR35 - his statement makes you part and parcel. However, an increase in day rate as compensation would seem fair.

Abbey Tax's assessment of the working practices disagrees. Their assessment is that the contract is outside of IR35.

However, what is interesting is that all the communications are coming from the software house and not the end client. I guess this may be incorrect.

[LondonManc]

yes, and given that a senior manager of the end client has declared that I must stay until all the applications that I support are finally decommissioned, then clearly I will have some work horizon. I've posted before that because of my personal circumstances, I wouldn't be as seriously affected by going PAYE as most would. The software house that MyCo is contracted to is engaging with QDOS over the issues and I guess I'll hear soon what the proposals are.

You're inside IR35 - his statement makes you part and parcel. However, an increase in day rate as compensation would seem fair.

[JohntheBike]

Might be worth hanging on in there and riding the storm out - better to be in a less than perfect role all year than waiting ten months for a perfect one.

yes, and given that a senior manager of the end client has declared that I must stay until all the applications that I support are finally decommissioned, then clearly I will have some work horizon. I've posted before that because of my personal circumstances, I wouldn't be as seriously affected by going PAYE as most would. The software house that MyCo is contracted to is engaging with QDOS over the issues and I guess I'll hear soon what the proposals are.

[LondonManc]

partially perhaps. However, although I know the permie pay scales of my end client, I don't know the same for the software house. Clearly there is an issue of who will be responsible for the SDS, assuming this will be done, but what I find interesting is that the nearest client role that I can equate to pays a minimum salary higher than I receive as a contractor. Granted, I'm effectively paid part time, but the arithmetic is by no means clear at the moment. I'll just have to wait and see what's offered and decide my course of action then.

Might be worth hanging on in there and riding the storm out - better to be in a less than perfect role all year than waiting ten months for a perfect one.

[JohntheBike]

You already know the answer to this.

For the vast majority, financials pulling contractors into Umbrellas will offer rates that equate to a little or reasonable level higher than perm. If you shop around for perm at financials you'll get near or match it, then with permie perks you'll surpass it.

Unless the rates increase contractors will be taking umbrella based contracts at financials on the understanding that they WILL be offered a permie job at the end of it.

This applies for permie-tractors who are savy enough to read the wall writing, as well as genuine contractors who although love the non financial benefits of contracting, ultimately, don't want to be taken for a ride.

You already know the answer to this

partially perhaps. However, although I know the permie pay scales of my end client, I don't know the same for the software house. Clearly there is an issue of who will be responsible for the SDS, assuming this will be done, but what I find interesting is that the nearest client role that I can equate to pays a minimum salary higher than I receive as a contractor. Granted, I'm effectively paid part time, but the arithmetic is by no means clear at the moment. I'll just have to wait and see what's offered and decide my course of action then.

[eek]

Which means permies will soon ask for pay upgrade to bring it to ex contractors level, because why shouldn't they?

Nothing good is going to come from this.

That comes later - in a lot of firms its just a matter of finding a person doing a vaguely similar role who hits enough of the equal opportunity requirements.

[LetterBox]

what I mean is are they being offered PAYE salaries at the same level or higher than their contracting rates?

You already know the answer to this.

For the vast majority, financials pulling contractors into Umbrellas will offer rates that equate to a little or reasonable level higher than perm. If you shop around for perm at financials you'll get near or match it, then with permie perks you'll surpass it.

Unless the rates increase contractors will be taking umbrella based contracts at financials on the understanding that they WILL be offered a permie job at the end of it.

This applies for permie-tractors who are savy enough to read the wall writing, as well as genuine contractors who although love the non financial benefits of contracting, ultimately, don't want to be taken for a ride.

[LondonManc]

what I mean is are they being offered PAYE salaries at the same level or higher than their contracting rates?

They'll still offer a day rate. What that converts to is probably available via a simple PAYE calculator online.
Whether they'll have to offer more to retain people will remain to be seen, but I'd imagine that they'll lose those people that have to travel and stay in London first.

[BolshieBastard]

Still better than permie PAYE I'd expect.

Not when you factor in paid holidays, pension contributions and other perks and benefits such as paid sick, bonus etc, etc.

[JohntheBike]

At our level of earning, you lose roughly just under 50%. 40% higher tax bracket plus 10% NI.

Yes, it will likely still be better than Permie through and through, but anyone having offered calculations to lenders for available funds After tax and utilities etc, will likely experience a short sharp shock if they're mortgaged to the hilt.

I cannot see clients upping the rates as they will likely exhaust all the options for those Willing to get taxed as an employee even if not benefitted as an employee.

Am hoping the All New CEST Tool™ will offer confidence to clients, down the line. (How's about that for wishful thinking?)

see my subsequent post.

from my personal point of view, I'd be very little worse off, for various reasons, in nett pay terms by taking a PAYE role at the same level as my contracting income.

[JohntheBike]

Still better than permie PAYE I'd expect.

what I mean is are they being offered PAYE salaries at the same level or higher than their contracting rates?

[simes]

so do you know in general how the PAYE salaries compare with the contracting remuneration?

At our level of earning, you lose roughly just under 50%. 40% higher tax bracket plus 10% NI.

Yes, it will likely still be better than Permie through and through, but anyone having offered calculations to lenders for available funds After tax and utilities etc, will likely experience a short sharp shock if they're mortgaged to the hilt.

I cannot see clients upping the rates as they will likely exhaust all the options for those Willing to get taxed as an employee even if not benefitted as an employee.

Am hoping the All New CEST Tool™ will offer confidence to clients, down the line. (How's about that for wishful thinking?)

[LondonManc]

Which means permies will soon ask for pay upgrade to bring it to ex contractors level, because why shouldn't they?

Nothing good is going to come from this.

Probably because permies get sick pay, holiday pay, pension contributions, etc.

[PCTNN]

Still better than permie PAYE I'd expect.

Which means permies will soon ask for pay upgrade to bring it to ex contractors level, because why shouldn't they?

Nothing good is going to come from this.

[LondonManc]

so do you know in general how the PAYE salaries compare with the contracting remuneration?

Still better than permie PAYE I'd expect.