Freelance Limited Company (FLC) offering from IPSE

[eek]

Thats usually a sign that you can't really defend what you are saying.

On this point can we call the FLC an utterly flawed plan, leave it and move back to trying to identify other methods and plans that may work...

[WordIsBond]

Thats usually a sign that you can't really defend what you are saying.

Well, to be fair, that's not necessarily the case. So much political discourse descends to that, and people hear it so much that it becomes second nature and tends to pervade discussions of any kind, especially on the Internet. It's often used by both sides, even when there can be very good arguments made one or both ways.

I actually think there are some good arguments to be made for something akin to the FLC. I've even made some of them on this thread. That does make it a little galling to be told I don't understand and am not listening....

It's just that the problems are there and not really being addressed, that I can see.

[LondonManc]

I wonder what they would expect us to pay?

Say a perm is on £48k and a contractor on £400/day for a similar set of skills/project.
ClientCo needs extra capacity to deliver on said project for 9 months as there is a cost-benefit to completing project before the end of the year.

So, perm pays appropriate PAYE, NI, etc on £48k, bringing their gross down from £4k/month to £2.9k net (approx based on TheSalaryCalculator).

Contractor, based on average 20 days per month grosses £8k +VAT (let's exclude the VAT for now as it's a separate issue).
From that 8k, what tax should we reasonably expect contractor to pay to make it worthwhile?
What are the benefits that permie gets?
Pension, training, sickness, holiday pay, redundancy, what else?

If you work on an average of 230 days per annum worked (4 weeks of holidays, 8 bank holidays, 2 sick days) and take that to a 12 month gross, that gives £92k pa. As a perm, that would net you just over £5k/month on the same salary calculator as the above. Umbrella income will obviously vary depending upon your expenses and billing model/umbrella fees but your expenses will probably be killed off anyway next year. That would give you, based on £100/month for umbrella fees and no expenses, a take home of £6644/month give or take (tax code dependant).

I think building up realistic case studies that we can present back seems a logical step given they HMG seems so fond of them.

[eek]

Just exclude VAT it saves arguments....

[LondonManc]

Just exclude VAT it saves arguments....

It does for the purposes of the illustration. Obviously nets a couple of hundred a month on a decent contract but given the whole paradigm in which we operate could change by that a week at least, it's pretty much irrelevant in the grand scheme (especially given it's not changing as far as we're aware).

[eek]

It does for the purposes of the illustration. Obviously nets a couple of hundred a month on a decent contract but given the whole paradigm in which we operate could change by that a week at least, it's pretty much irrelevant in the grand scheme (especially given it's not changing as far as we're aware).

Trust me on this it just annoys hmrc as people get it wrong. Please don't do examples with Its generally tax neutral and just adds confusion

[LondonManc]

Trust me on this it just annoys hmrc as people get it wrong. Please don't do examples with Its generally tax neutral and just adds confusion

OK, but based on the example above, you can see the sort of numbers that come out. How much do they think they should take off us for us forgoing the rights that perms have.

Oh yes, missed another one. Enforceable notice periods.

[eek]

OK, but based on the example above, you can see the sort of numbers that come out. How much do they think they should take off us for us forgoing the rights that perms have.

Oh yes, missed another one. Enforceable notice periods.

Nothing / everything because when you get to the very low paid you see them being paid very little (often less than the permies they work alongside) with none of those things

[MicrosoftBob]

I wonder what they would expect us to pay?

Say a perm is on £48k and a contractor on £400/day for a similar set of skills/project.
ClientCo needs extra capacity to deliver on said project for 9 months as there is a cost-benefit to completing project before the end of the year.

So, perm pays appropriate PAYE, NI, etc on £48k, bringing their gross down from £4k/month to £2.9k net (approx based on TheSalaryCalculator).

Contractor, based on average 20 days per month grosses £8k +VAT (let's exclude the VAT for now as it's a separate issue).
From that 8k, what tax should we reasonably expect contractor to pay to make it worthwhile?
What are the benefits that permie gets?
Pension, training, sickness, holiday pay, redundancy, what else?

If you work on an average of 230 days per annum worked (4 weeks of holidays, 8 bank holidays, 2 sick days) and take that to a 12 month gross, that gives £92k pa. As a perm, that would net you just over £5k/month on the same salary calculator as the above. Umbrella income will obviously vary depending upon your expenses and billing model/umbrella fees but your expenses will probably be killed off anyway next year. That would give you, based on £100/month for umbrella fees and no expenses, a take home of £6644/month give or take (tax code dependant).

I think building up realistic case studies that we can present back seems a logical step given they HMG seems so fond of them.

Add in some bench time because some years it will happen, if only for ending contracts in the summer/xmas silly season, so maybe take another 4 weeks off to average it out

[SueEllen]

Add in some bench time because some years it will happen, if only for ending contracts in the summer/xmas silly season, so maybe take another 4 weeks off to average it out

Since eek and others are doing surveys I think they could use the survey results to work out an average bench time so the examples are backed up by real figures.

I would also add into the case studies:
1. Average sick days per year - as HMRC are comparing us to permies then use permie stats which aren't hard to google. for example this link. Everyone knows self-employed people take less sick days but you start treating people like permies then they are going to work out where when they can claim from the government.
2. Costs of an accountant - I think you need to find a cheap and an expensive example then half the amount due to costs really varying.
3. Then add in figures for insurances - professional indemnity, public liability, company equipment away from home, etc You can get quotes for different professions using some advertised insurance brokers.

I would then do a case studies that used skills that are hard for companies to get e.g. engineering in nuclear industry and IT skills that get top rates.

In the case studies I would then include:
1. Someone who gets a contract in the back of beyond so they have to stay 100 miles away from home
2. Someone who gets an illness/shatters a limb so for 3 months they can't contract as they can't get to their client and the other month they are getting a new contract, but most importantly they don't claim sickness benefit.