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sharky
18th February 2016, 15:23
This is my 1st post but have been a long time reader of this forum.

I’m currently contracting in the public sector IT (2th Gig + with a few extensions on each ) did contracting for time back in late 90’s (millennium bug paid for my 1st Mercedes at 21 them where the days :banana:)

Now all this Umbrella T&C expenses changes :ladybags:

Why do I use a Umbrella Er To Stay Clean and Dry :)

My rate is just about on the bracket that would be recommended to go limited as such did the maths and there was not much of benefit as my ir35 status is risky. So went with a CUK recommended Umbrella company. (When I say CUK recommended it was awarded CUK Best Umbrella Company of the year at the time )

So far it good been working under a Umbrella claiming legitimate T&C expenses has seen take home rate of around 70% tax affairs are all in order with no need for self assessment forms.

Clients have been good even the “much loved” agents have given me not many problems bar a few late payments on bank holidays.

Overall I feel that contracting as made be a better worker the risk of it all wanting that extension or to be in the running to be on next BIG project all makes you work harder you deliver where “some” public sector permanent workers do not. With the new T&C expenses changes all that is to end. Some may end up taking home less than the permanent workers gets without all the benefits.

I can understand the governments need to address contracting rules can’t say I do not feel for the self employed shelf stackers as I call them you know the dot com companies I am on about that make it’s “staff” use Umbrellas to claim expenses just to get a minimum wage. Government can’t even make them pay tax let alone pay it’s staff in descent way.

HMRC has not factored in how much it relies on IT contractors in the public sector I’m sure that many on this site have been at least been offered a gig in various government services in their time.
Rates may not be the best but are not too bad it’s better then bench time I’m my view.


SO what next

GO limited and all that goes with it IR35, VAT ,Accounts and Self assessment for 30k a year ?

Stay with Umbrellas and take the hit with T&C expenses ?

Give up contracting and go permanent ?

WordIsBond
18th February 2016, 15:56
GO limited and all that goes with it IR35, VAT ,Accounts and Self assessment for 30k a year ?

Stay with Umbrellas and take the hit with T&C expenses ?

Give up contracting and go permanent ?
Probably not Ltd at that level of income.

If you can get a perm role that will let you develop new skills or improve the ones you have, then you could maybe come back to contracting in a few years at a rate that would make it worth it.

But can you handle perm after years? It's a lifestyle question, not just a money one. If not, maybe you just need to suck it up and stay umbrella, and look for as many roles close to home as you can.

Or stay umbrella for the next year or two but also, in your spare time, do something to ratchet up your skills.

LondonManc
18th February 2016, 15:59
Change T&C to T&S for starters. :)

Very much a personal decision. For me, I can change my accommodation level and make the same margin or more than I do now. Would you really want to go back to permiedom for the sake of not being able to claim back £x expenses each day?

northernladuk
18th February 2016, 16:00
The rule of thumb is around 30k and lower the Umbrella was the better way to go but that's going to change now. It will be interesting to see if someone can come up with a new figure for next year. I'd guess it would be highly dependant on how much expenses would be incurred.

If you are contracting on 30k a year I would take option C and go get some skills you can get paid better for.

jamesbrown
18th February 2016, 16:11
Give up contracting and go permanent ?

Probably this TBH, unless you can attract a better rate in the private sector on a contract that is outside IR35. It isn't all about the money, but having a company is a significant amount of hassle to be weighed against an income that is probably no better than what you'd get as a permie, after factoring employment benefits. This may be a good opportunity to think about the long-term and the skills that you'll need to get you there. That way, you can have your employer pay for that training and come back to contracting in future with a good idea about what it entails. Very personal decision, of course.

gables
19th February 2016, 13:42
The rule of thumb is around 30k and lower the Umbrella was the better way to go but that's going to change now. It will be interesting to see if someone can come up with a new figure for next year. I'd guess it would be highly dependant on how much expenses would be incurred.

If you are contracting on 30k a year I would take option C and go get some skills you can get paid better for.

Excuse my ignorance here; this £30k rule of thumb, is that gross contract income (invoice total for year) or net income in to your personal bank?

SueEllen
19th February 2016, 13:46
Excuse my ignorance here; this £30k rule of thumb, is that gross contract income (invoice total for year) or net income in to your personal bank?

Gross invoice.

gables
19th February 2016, 14:18
Gross invoice.

Ta

Yonmons
3rd March 2016, 09:36
Ive already made my decision (presently under umbrella as it suited this gig been here 8 months) as required by my contract terms I am giving my client co 2 weeks notice on Friday 25/3.

I have my Umbrella chasing me to go Ltd, but I have told them I will let them know my decision when I have made it (eventually) I just cant take the hit on the T&S at my present location, I am commuting 116 miles a day, and getting up at 04.30 to do it, 9 hrs on site, and an average of 3 hrs a day of travelling. I sit with a bunch of contractors who live locally (and some have been here years) all Ltd, and quite clearly working within Ir35 but kidding themselves they are out of it.

I have applied for a permie role local to me (walking distance) its bobbins money but the locality and lack of the commute must be worth 10k a year. (Yes I know its not money in the bank though)

I have always considered myself a contractor been doing it 16 years this year but the times they are a changing, and rates certainly aint getting any higher. I suspect I will find it hard as a permi, and even now if a local gig comes up I`ll take it, and may use an umbrella dependant on circumstances.

For me the chancellor as sent me a "wake up call", and as long as that wake up call is not longer going to be at 04.30hrs I`m happy.

northernladuk
3rd March 2016, 09:40
If it suits you then it's a good choice. I suspect a lot more of the experienced heads that are keeping abreast with the changes might be going a similar way before April 17.

DallasDad
3rd March 2016, 22:51
(When I say CUK recommended it was awarded CUK Best Umbrella Company of the year at the time )


If it is the one I am thinking of take a good look at your T&Cs especially if they ahem... 'persuaded' you to opt out.
Specifically Sections 13.1 and 16.4

sharky
4th March 2016, 14:52
Yep I did fall for the trap of opting out did really understand it all at the time.

yes it does look like my T&Cs with the umbrella does say i cant work for any one linked to my current client for the next 12 months bit rich given that its was me that has paid them for their services not any clients.

would like to see if that would hold up court.

DallasDad
4th March 2016, 18:54
Well as I read from the myriad of helpful posters here on that subject in another thread (and phew in my case)!
Apparently if you were introduced to your client before you opted out then it does not apply and you can ignore that section.

SueEllen
4th March 2016, 19:26
Well as I read from the myriad of helpful posters here on that subject in another thread (and phew in my case)!
Apparently if you were introduced to your client before you opted out then it does not apply and you can ignore that section.

Not strictly true.

The issue is the clause hasn't been tried out in a higher court so therefore both parties are right until it's tested in a higher court.

The best way is to ensure your contract matches what you specifically want. However be aware there will be some cases where you fight to opt-out and aren't allowed to where the opt-out doesn't apply anyway e.g. where the client requires an enhanced DBS check

Danglekt
9th March 2016, 17:52
I dont think I would bother with all the stress for ~£130 a day rate (bit of fag packet maths). I'd just go perm and coast.

KentDogWalker
6th April 2016, 17:25
So I can't get my lunches tax free from now on then? Apr 6th

northernladuk
6th April 2016, 17:35
So I can't get my lunches tax free from now on then? Apr 6th

Nope.

KentDogWalker
6th April 2016, 17:47
Nope.

I'm Ltd, working for my client that found me via a recruitment agency (not an umbrella). Reading elsewhere it seems I can still claim T&S, no?

northernladuk
6th April 2016, 17:48
I'm Ltd, working for my client that found me via a recruitment agency (not an umbrella). Reading elsewhere it seems I can still claim T&S, no?

Yep

TheFaQQer
6th April 2016, 18:09
I'm Ltd, working for my client that found me via a recruitment agency (not an umbrella). Reading elsewhere it seems I can still claim T&S, no?

You taking tips from Suity on how to drip feed information??

What's your IR35 status?

KentDogWalker
6th April 2016, 18:33
I'm outside of IR35.

northernladuk
6th April 2016, 18:38
Maybe.

mudskipper
7th April 2016, 06:11
I'm outside of IR35.

Nothing has changed for you. If you were able to claim to T&S before (i.e. within the 24 month rule) then you can continue to do so.

KentDogWalker
7th April 2016, 07:52
thanks !

northernladuk
7th April 2016, 08:36
Might be worth subscribing to some newsletters from the likes of CUK, contractorweekly and your accountant so you can actually understand major changes that are happening to yourprofession before they have hit hey... ;)