Hello - Opinions?

[Rik1087]

Hi All,

Long time member / reader as i have always wanted to make the jump from Perm to Contracting, but over the past few years IR35 has supressed my appetite.

However, i feel the time is right, and as will probably be commented, the time is never right, and there will always be something.

My situation: currently Perm in a consultancy role and base salary is 65k, with on average 4k bonus, and 5k stocks payment annually. So all in all around 74k pre tax.

Back in the good old days, when judging take home pay & everyone ran a Ltd, it was very hard to ascertain what a 500 or 600 day rate would look like as there were so many variables in how an individual could run a Ltd. But today when we talk about an inside role, i am hoping the accuracy in take home vs a day rate is fairly concrete (minus a few calculation differences in the way holiday is worked & whether a pension contribution is made).

So i am hoping for your views on the following:

£600 a day inside role (12 month contract) - my research brings in figures ranging from:

£7383 per month - Paystream Calculator
£6876 per month - Brookson One Calculator
£5694 per month - ContractorCalculator.com
£6640 per month - Clarity

I would lean towards Clarity's accuracy due to the reviews on this site, is that a figure that seems the most realistic?

If so, £6640 vs base £3800 on my current perm it seems a no brainer? I'd be earning £2840 extra a month.

I know there is a lot of pain if you have been an outside contractor for so long, and then have to take an inside role, you're losing thousands a month, but coming from a perm to an inside role, there is still a lot to be pleased about, am i wrong?

Obviously there are downsides, no holiday, sick, workers rights and all the extra tax you pay vs outside roles, but coming from perm those dissipate when theres an extra 3k on the table.

Would you agree with my assessment or am i missing something key that would make you hold on to the perm role?

Thanks in advance - and also open to abuse, i have read many a thread on here to know an open asking for your opinion thread receives many a "witty" response.

[malvolio]

1. Don't do it for the money. Do it for the work/life balance

2. Even then base it on working 7 months a year. If you get more it's a bonus.

3. You don't get expenses, even permie ones you don't currently have to think about.

[malvolio]

3. No, absolutely not. You can ask, and you may be lucky, but visits to your client's site are not claimable. Even then, you only save the tax not the cost.

Inside IR35, think of yourself as an employee, not as a separate business and things become much clearer...

[hobnob]

A few other aspects to consider:

* Do you get pension contributions from your current employer? You won't get that as a contractor (i.e. all contributions come out of your daily rate, not from the client). However, salary sacrifice can be an effective way to reduce the amount of tax you pay.

* Does your current employer pay for training courses, exams, etc.? As an inside IR35 contractor, you'll have to pay for them yourself, and you won't get paid for those days.

* How do you want to handle holiday pay? See this thread for more details:
Holiday Pay - Contractor UK Bulletin Board
NB That might explain why you got slightly different figures from each calculator, so it's worth checking how they did each calculation.

[northernladuk]

1. I know, you're right. It should be about the flexibility, but it is hard to overlook the financial gain

But you have to factor in the bench time and gigs evaporating mid contract. So if you can't balance it and still find it hard to overlook the finanical gain then you are approaching it wrong.

2. Very fair point. But even i worked 7 months of 12 I would end up breaking even.

But I'd bet everything I have your lifestyle would go up because of the oodles you are earning so a 7 month year would be a proper sweat. 7 months breaking even at your current lifestyle, not the one you'll be moving in to. I've seen grown men cry when they get canned mid gig because they are just looking at the best possible yearly income and then reality hits.

3. True, the contract i have mentioned for the 600 rate, is fully remote. If an office visit is required, have you seen anyone work travel expenses being covered in upfront discussions?

Possibly but it's highly dependant. For me it's part of the service. You go where you need to sell your services. WFH isn't the norm, its a benefit. If the client wants you in you go in under your own steam. Would you pay your accountants mileage to come visit your home? No. If it's expensive like a train and night over in London then by all means mention it at the interview but if it's neck and neck with a contract that isn't going to mention it it's gonna put you in second place IMO. It's a balance that you'll have to work out. How much are you willing to stump up to earn 6 figures a year?