Trying to figure out if contracting is worth my while

[northernladuk]

Just to add I'd be extra vigilant with a contract via a contractor. I'd be very suspicious that he's trying to off load responsibility such as notice periods and the like to suit him particularly if you are a newbie and don't know your contractual rights.

If you can, get anything out about no pay without a timesheet but if has anything about him he'll not go for that.

[northernladuk]

Get the contract check by QDOS. You should really have PI insurance which they sell and you will get you may get the contract for free.

Do a lot of reading up in the newbie guides to the right and get an idea of what you are doing rather than just running in blind. Get an accountant and a business bank account etc.

[lionheart79]

thanks folks.
I've seen the draft contract and it includes lots of statements on not being an employee, worker, agent; about not being directly supervised by the Client, about being able to offer a replacement consultant (although in practice this would never happen!), and about using my own IT equipment (again I doubt whether this would happen much in practice) so I think its fairly robust. The day rate is also £550 so a little higher than I said initially.

Appreciate all the advice given.

[MrMarkyMark]

I don't understand this? Why does the engagement style make it a moot point? It's what they expect you do to and act so it doesn't matter what is signed off, its whether you are disguised permie on site... or did I not understand what you are saying?

What I was suggesting is, there is a point of view, that says if it is a perm replacement type role then you should be considered inside (maternity for example?).
If there is no chance of that perm role ever happening then it becomes a moot point.

That's why I was suggesting that the OP may not necessarily be inside, although, you would hope he would take any notice of a potential red flag.

Obviously, all the real meat is in, D&C, working practices, statement of deliverables etc. etc.

Just my POV and there is no refund available

[northernladuk]

Unfortunately at the banks this is very common, most perm headcount is frozen, so no choice but to engage contractors.
Whether it is considered an IR35 flag is a moot point, because it is very unlikely, in many cases, that permanent headcount would be signed off.

I don't understand this? Why does the engagement style make it a moot point? It's what they expect you do to and act so it doesn't matter what is signed off, its whether you are disguised permie on site... or did I not understand what you are saying?

[MrMarkyMark]

This would indicate to me they want a permie but will make do with a contractor which will put you inside IR35.. Well not for sure but it's a big red flag for me.

Unfortunately at the banks this is very common, most perm headcount is frozen, so no choice but to engage contractors.
Whether it is considered an IR35 flag is a moot point, because it is very unlikely, in many cases, that permanent headcount would be signed off.

I'm not sure I'm worth a lot more than £500 a day for my experience/skillset.

Only you or your peers would actually know this. However, it seems they are quite keen to engage you personally.

Anyway good post, with regards to comparing contract vs. perm.

Good Luck!

[The Spartan]

I'm not sure I'm worth a lot more than £500 a day for my experience/skillset. To be honest, I'd probably look to go permanent after a period of contracting if possible, but want to make the most of the contracting income while I'm at it and if it goes great then maybe I can stick at it like you guys

A very good friend of mine is the (permie) Chief Security Officer for a certain insurance aggregator, he was recently offered a contract role with a day rate of £1200 due to his knowledge and expertise. Ensure you do some specific research regarding what you're worth as £500 sounds a bit low to me for security especially in light of what happened to TalkTalk.

[northernladuk]

The idea of contracting came about mostly because this bank who are interested in me expressed that it was much easier to get me on board as a contractor than permie. And furthermore through this other contractor's company as they were an approved vendor already. The bank negotiated the rate with me directly - you are probably completely correct in assuming the other contractor is taking a cut over and above this but not out of what I negotiated. I've worked with both parties before as colleagues in a previous place of work so there is some trust here, I'd be surprised if I was being royally screwed. I'm not sure I'm worth a lot more than £500 a day for my experience/skillset. To be honest, I'd probably look to go permanent after a period of contracting if possible, but want to make the most of the contracting income while I'm at it and if it goes great then maybe I can stick at it like you guys

This would indicate to me they want a permie but will make do with a contractor which will put you inside IR35.. Well not for sure but it's a big red flag for me.

[lionheart79]

thanks for the replies folks, and for the understandable notes of caution.
I'm not giving up 65k of permie salary (plus 12% pension, medical insurance and 5k likely bonus) lightly. I feel like I've reached a ceiling and I don't enjoy a lot of the work I do currently, and in this type of consultancy (which involves travel anyway) its move up or move out...

The idea of contracting came about mostly because this bank who are interested in me expressed that it was much easier to get me on board as a contractor than permie. And furthermore through this other contractor's company as they were an approved vendor already. The bank negotiated the rate with me directly - you are probably completely correct in assuming the other contractor is taking a cut over and above this but not out of what I negotiated. I've worked with both parties before as colleagues in a previous place of work so there is some trust here, I'd be surprised if I was being royally screwed. I'm not sure I'm worth a lot more than £500 a day for my experience/skillset. To be honest, I'd probably look to go permanent after a period of contracting if possible, but want to make the most of the contracting income while I'm at it and if it goes great then maybe I can stick at it like you guys

I'm 36, unmarried.
I will look to use pensions to improve the baseline figures I originally quoted however I realise I'll need to pay myself equivalent salary to be eligible.

[MrMarkyMark]

FTFY

Hello everyone, great forum!

I currently work in IT Security, 7 years experience in this field. I've got the 'offer' of working with some ex big 4 colleagues who now work at a bank, some are permies and some contractors. I.e. a 6 month contract, £500 a day, contracting via another contractor's company (its easier to do it that way as his co. has already been approved as a vendor there and he can get the high commission, for the role, paid directly to his LTD).

[BrilloPad]

Could you move as a permie for more cash?

Your contract take home figures would look a lot better if you did some income shifting to your spouse. And put a lot into your pension.

How old are you? If approaching 55 the pension option is very attractive.

[northernladuk]

First off...... I'd be hard pressed to leave a 65k job I enjoy purely for financial reasons. Quoting an equivalent rate doesn't take in to account the risks of contracting. Bench time, unpaid sick and hols, no pension. There is also other aspects not financial like working up and down the country, getting canned, working in awful places from time to time. If I was on 65K and enjoyed my work I'd not be giving it up anytime soon.

I also think you need to be careful contracting via a contractor. 500 a day certainly sounds pretty mediocre for a security specialist being paid 65k. I'd certainly be doing a bit more research on jobserve or ITjobswatch to make sure I'm not being taken for a ride by the other contractor. We've got a security specialist in here and he's on quite a bit more than 500 a day.

[lionheart79]

Hello everyone, great forum!

I currently work in IT Security, 7 years experience in this field. I've got the 'offer' of working with some ex big 4 colleagues who now work at a bank, some are permies and some contractors. I.e. a 6 month contract, £500 a day, contracting via another contractor's company (its easier to do it that way as his co. has already been approved as a vendor there). The good news is that they would be willing to wait for me during my notice period - although I would never count that as gospel as a contractor of course!

I'm just not that sure its that much more financially profitable. I'm on £65k base. My co. pension contribution is 12% (I pay 8%). That's effectively 4k take home plus 1k into a pension fund, i.e. 5k a month. Let's say a tangible post-tax total of £5,250 a month including extraneous benefits (medical insurance, bonus, job security etc.)

Looking at contractor calculator, they reckon £500 a day equates to a net take home of £6,261 outside IR35 and £4,968 inside it The respective equivalent salaries, they reckon, are £124k and 90k. Looking at my current salary/take home that seems hard to believe.

I'm fairly certain the contract I'll be given will be outside IR35. However the take home isn't significantly higher than what I have already, and of course contracting is a gamble. I want to give it a go and make the move. Am I missing something?