Weighing up an IT Contract opportunity vs Perm

[1manshow]

Hi All

Worked as a permie all my life, have also secured a perm job at a government function as a developer (£55k), with great benefits such as final salary pension, 30 days holiday etc.

I am also in receipt of an offer for a 6 month contract (which, according to recruiter is very likely to get extended) for £450 a day.

In many ways, the contract role is attractive as, it will accelerate my savings for a deposit for a property - despite the perm role likely to be less stressful and a much better work/life balance.

With regards to IR35, I will go ahead and do my tax affairs assuming I am within IR35 (don't want the tax hassle) - is there advice people can give whether to go LTD or an Umbrella company, and are there any established reputable companies that I should consider?

Also, what are the pitfalls/considerations I should be aware of when weighing these two options up?

Many thanks for everyone's help.

[malvolio]

Read the guides on here and IPSE's Guide to Freelancing (www.ipse.co.uk) which will answer a lot of the basic questions.

However to answer your immediate ones, the £450 a day inside IR35 gig is paying less than the permie one in the real world, so you won't have a sudden excess of income to squirrel away. Also, ignore the agent (good advice in general, not just in this case...), you can easily be out of work in 6 months time or less and scratching for the next one in a very competitive market an dall he's interested in is securing his income and bonus.

Your other questions have been answered many times on here incidentally (first lesson of being a contractor is that you largely are on your own and have to make your own decisions) but if you do go contract then umbrella is the best option until you know what you're doing. Right now you have no idea how much you don't know.

HTH...

[SueEllen]

Standard advice is unless there is a very good reason to start contracting now then take the permie role and develop your career. That way you can end up in management or something else then if you are forced to go contracting e.g. due to age discrimination then you will get more senior roles that tend to pay better.

[BrilloPad]

Don't trust an agent. If you shake their hand, count your fingers afterwards.
Occasionally you get people on CUK saying their contract gets withdrawn the day before it starts. Only yesterday someone posted on here about getting a renewal for 2018. Withdrawn the next day due to budget cuts!

So sounds like permanent is better for you.

If you decide to go contract, do as Mal says then come back and ask questions.

And take the advice you want to hear.....

[fatboyslim]

start with an umbrella, see if it works out, and if you like it, go LTD in your next gig or next extension.
If you don't like it, go back to being a permie.

[BR14]

start with an umbrella, see if it works out, and if you like it, go LTD in your next gig or next extension.
If you don't like it, go back to being a permie.

is it that simple? the permie job you refuse isn't going to be on hold for you.

[fatboyslim]

is it that simple? the permie job you refuse isn't going to be on hold for you.

True.
Actually it seems I spoke too soon without properly reading his post, it seems OP is more in it for short term money to get into property ladder, in which case my advice was wrong, because if you like the perks of stable perm job, you will hate being contractor, and its risky to do it for short term, not worth the headache.

[MrMarkyMark]

FTFY

Don't trust an agent. If you shake their hand, be sure to check your Patek is still firmly on your wrist and definitely count your fingers afterwards.

[1manshow]

Thank you for your advice

On further looking into it, I won’t have to declare myself within IR35.

After all deductions (pensions and student loans) my perm job comes to £3000 a month.

The contract role is likely to be ~£6700 a month (excluding pension if I take one up).

The contract role and company are notorious for long term contracts (financial sector) - and it wouldn’t surprise me if I end up there for a couple of years. It is starting to seem like the more attractive role.

The perm opportunity is very good mainly due to the perks of a final salary pension / I have little doubt in getting a perm job (I’ve actually had 5 offers in the past couple of months, with the 6th being the contract role). So I guess it’s the fact that a final salary pension job is almost non-existent!

Saying that, if I go into contracting, I could maybe get a couple of properties at least, effectively working as some pension.

[nucastle]

Thank you for your advice

On further looking into it, I won’t have to declare myself within IR35.

After all deductions (pensions and student loans) my perm job comes to £3000 a month.

The contract role is likely to be ~£6700 a month (excluding pension if I take one up).

The contract role and company are notorious for long term contracts (financial sector) - and it wouldn’t surprise me if I end up there for a couple of years. It is starting to seem like the more attractive role.

The perm opportunity is very good mainly due to the perks of a final salary pension / I have little doubt in getting a perm job (I’ve actually had 5 offers in the past couple of months, with the 6th being the contract role). So I guess it’s the fact that a final salary pension job is almost non-existent!

Saying that, if I go into contracting, I could maybe get a couple of properties at least, effectively working as some pension.

Any forward planning notions can go out of the window. I'm 10+ years in and regardless of the dates on the contract or any assumptions you might make, the only thing you can rely on in this day and age is that anything can happen. In your first year or two, concentrate on building up a war chest, not your financial obligations.