Freelance Limited Company (FLC) offering from IPSE

[Lightwave]

......- most contractors gross (at least) twice what they would get as perm, which means even on equal tax-footing they only *need* to work about 7 months of the year to come out with the same. The fact that most of us push to try and work 9/10/11 months per year and have a better lifestyle (than our equivalent permie-selves) with the extra cash has made us overly greedy

I'm not sure this is actually true any more?
Outside of IT, there are a lot of not-very-enticing LTDCo rates being advertised.
As an engineer, if I got a decent permie post I could probably gross 80% or so of what I get as a contractor these days.
Had I taken the permie route a few years ago, I might be doing OK in management now.

A far cry from when I left permiedom twenty-odd years ago, in my first contract I was paying enough tax to pay my wife's salary at the time, she was Deputy Head of a small school.

There used to be CAD people and technicians contracting on good money, the rates you see advertised are rubbish now.

It's not just about top software people in City banks.

[LisaContractorUmbrella]

Tax is all about arbitrary lines - 20% tax on earnings under £30k odd a year and 40% on earnings over that - completely arbitrary

Why? Because it doesn't seem 'fair'? This isn't about fair, it's about tax and trying to impose tax restrictions according to employment law is never going to work as Employment Law is ever changing and evolving and too open to interpretation


Contract rate may be twice perm salary but that's like comparing apples with oranges - contractors don't get holiday pay, sick pay, statutory payments, company pension schemes etc etc etc

[cojak]

I'll certainly do the latter. Frankly, it's a huge PITA to have the same conversation in two places, and CUK is far more active. I probably won't be posting over there, but I do read the forum. Someone from IPSE needs to keep abreast of the conversations happening here and loop them back into their decision processes (i.e. in a more official capacity; I know there are a few IPSE CC members that post unofficially).

I refer the honourable member to my previous answer to an earlier question...

And since this isn't an approved organ of IPSE, I doubt you'll get any official response here. 'Join up and see the official response on our website' will be the unofficial official reply I would imagine.

[eek]

I refer the honourable member to my previous answer to an earlier question...

I will eventually respond to the IPSE comment. the end response will be very short and is almost already written in my first response to this thread (you can remove the bit where I call them utterly incompetent... You can't say that to someones face and expect them to listen).

[northernladuk]

Will this be a 100% HMRC compliant and QC approved scheme?

[dynamicsaxcontractor]

IPSE what are you thinking?

This is the worst idea ever, what are they thinking of? What are they doing with all that money we are paying in membership fees? I am disappointed with IPSE and I will not renew my membership unless this stupid idea of an FLC is abandoned.

[eek]

Will this be a 100% HMRC compliant and QC approved scheme?

No but its created by a very large consultancy we often compete against for work....

[pr1]

Tax is all about arbitrary lines - 20% tax on earnings under £30k odd a year and 40% on earnings over that - completely arbitrary

completely different

someone on £30100 pays the same tax as someone on £30000, plus a bit more on the extra £100

drawing a line between where you can incorporate and not means someone on £15000 might pay £1000 tax but someone on £15100 might pay £900 tax - unfair

[TheFaQQer]

This is the worst idea ever, what are they thinking of? What are they doing with all that money we are paying in membership fees? I am disappointed with IPSE and I will not renew my membership unless this stupid idea of an FLC is abandoned.

Please make your views known on the survey to members - that is the only way that the members can influence this now, and as a members organisation the board must listen to the views of the membership.

I have made my thoughts on the FLC pretty clear from day one, and will continue to do so now that we have some detail, but the more people that comment the more representative it will be.

I would also encourage people to use the comments box to answer whether they would use an FLC, if it came into reality.

[MrMarkyMark]

hence if you work 7 months and have 5 months sick/holiday you come out with the same as permie - most clientco's (in my engineering experience) don't pay full pay sick for more than 3 months anyway

I'm not sure this is actually true any more?
Outside of IT, there are a lot of not-very-enticing LTDCo rates being advertised.
As an engineer, if I got a decent permie post I could probably gross 80% or so of what I get as a contractor these days.

So, in engineering is it 2* rate, or just 20% extra, compared to perm?

@pr1, you seem obsessed with comparing yourself / us to permies.
Would you say your skill and experience levels are the same?
If so, wouldn't you say your client was just buying a bum on seat and saving money on perm?

I hope to offer skills and industry experience very few permies have, at a principle level.
Therefore, there is a good price charged for this to clients.

Principle Consultancy from <Enter Big BI Software Vendor Here> was £2K PD a few years ago. Admittedly, I suspect this has probably decreased to around £1800 PD now.

All I know is, I'm quite a bit cheaper and in most cases more knowledgeable than the consultants the vendor supplies.