Perm to Contract – Financials

[kyber]

I found the learning curve to being a contractor (at high rates from the off, admittedly) to be steep. Even after over a dozen years as a big 4 consultant used to working with lots of different clients, and talking to a good many friends who were (and still are) long term contractors, it was still hell of a transition.

Thank goodness I have spent the money on a good accountant. They cost me £200 a month, which I know is double (if not more) than what a lot on here pay, but I have found their guidance invaluable. It is amazing how often the answer to questions on this forum boil down to ("ask your accountant") often followed shortly afterwards by ("get a better accountant").

[Harvey]

But you may only work 6 months of the year, so that daily rate becomes £250 a day over the year. Can you live with that possibility?

Have you actually got a contract offer in the bag? If not, you will get what you get when you land your first gig.

You have zero contracting experiance, so unless you are in a very niche field and are already known to prospective clients you are unlikely to get that rate from the word go and you will struggle to get agents to take you seriously.

For most on here contracting isn't about the money. It can be good, *can* be, but really its about the freedom to pick and choose clients, not to have to deal with the HR bull tulip that comes from being a permie and being master of your own destiny.

Think long and hard about why you want to do it, and how long you can live being out of work before the savings run out.

Exactly what I was thinking.
I haven't even moved into contracting yet, my plans have been delayed till Sept due to redundancy at work.

However, my situation aside, yes you could be working for half year and not the rest. You wont get such a easy time taking the annual leave, as the projects you may work on will require you there all the time. Benefits/pension there are none, hence the daily rate justifies that.

Also your permanent experience may count for something but at the rate of £500 p/d initially doubt it. Over time with contracting experience then yes.

As DaveB also said its all about freedom to choose clients and not have to deal with HR and corporate bull that I am going through at the moment.

[unixman]

If this is not a sockie, I will eat my hat. Otherwise: stay where you are until made redundant, then try contracting.

[oscarose]

I am looking to move to contracting but not able to gauge whether it will be good financial move.

I have been in my current job for last 8 years and get around 70K in salary.

On top I get:
• 30 Days leave
• Pension contribution of 15% if I sacrifice 5% salary.
• Tax free matching shares of up to £1500.
• Child Care vouchers of £2916 - I joined the scheme before law changed.

If I move to contract then I will get close to £500 daily rate.
Any advice ?

Stay put.

[DaveB]

I am looking to move to contracting but not able to gauge whether it will be good financial move.

I have been in my current job for last 8 years and get around 70K in salary.

On top I get:
• 30 Days leave
• Pension contribution of 15% if I sacrifice 5% salary.
• Tax free matching shares of up to £1500.
• Child Care vouchers of £2916 - I joined the scheme before law changed.

If I move to contract then I will get close to £500 daily rate.
Any advice ?

But you may only work 6 months of the year, so that daily rate becomes £250 a day over the year. Can you live with that possibility?

Have you actually got a contract offer in the bag? If not, you will get what you get when you land your first gig.

You have zero contracting experiance, so unless you are in a very niche field and are already known to prospective clients you are unlikely to get that rate from the word go and you will struggle to get agents to take you seriously.

For most on here contracting isn't about the money. It can be good, *can* be, but really its about the freedom to pick and choose clients, not to have to deal with the HR bull tulip that comes from being a permie and being master of your own destiny.

Think long and hard about why you want to do it, and how long you can live being out of work before the savings run out.

[unixman]

FFS whose brag-a-sockie is this. Come out come out wherever you are.

[SimonMac]

Why do you think I am inexperinced?

See below

I am looking to move to contracting but not able to gauge whether it will be good financial move.

I have been in my current job for last 8 years and get around 70K in salary.

On top I get:
• 30 Days leave
• Pension contribution of 15% if I sacrifice 5% salary.
• Tax free matching shares of up to £1500.
• Child Care vouchers of £2916 - I joined the scheme before law changed.

If I move to contract then I will get close to £500 daily rate.
Any advice ?

[eek]

Why are you trying to become a contractor. Is it just financial (as if it is that's a stupid idea)...

[TheFaQQer]

Why do you think I am inexperinced?

Location is london.

Because you have zero days of experience as a contractor.

[garichd]

Why do you think you'll get a £500 day rate as an inexperienced contractor? Skill set? Location?

Why do you think I am inexperinced?

Location is london.

[stek]

I am looking to move to contracting but not able to gauge whether it will be good financial move.

I have been in my current job for last 8 years and get around 70K in salary.

On top I get:
• 30 Days leave
• Pension contribution of 15% if I sacrifice 5% salary.
• Tax free matching shares of up to £1500.
• Child Care vouchers of £2916 - I joined the scheme before law changed.

If I move to contract then I will get close to £500 daily rate.
Any advice ?

Why do you think you'll get a £500 day rate as an inexperienced contractor? Skill set? Location?

[garichd]

I am looking to move to contracting but not able to gauge whether it will be good financial move.

I have been in my current job for last 8 years and get around 70K in salary.

On top I get:
• 30 Days leave
• Pension contribution of 15% if I sacrifice 5% salary.
• Tax free matching shares of up to £1500.
• Child Care vouchers of £2916 - I joined the scheme before law changed.

If I move to contract then I will get close to £500 daily rate.
Any advice ?