Please feel free to put me right here.
I am a contractor in a fairly typical contract situation and I'm trying to work out if there is any benefit at all in continuing to use any kind of umbrella or limited company solution to "maximise" my earnings. Because according to all my calculations, they are an appalling rip off, and I would be better off as a simple PAYE employee of my agency.
For the record, here are my circumstances:
- I am on an hourly rate of £37.5 with an IT company in London
- i work 40 hours per week
- I live in Berkshire and travel to work in London by train and tube (£75 per week). I work 13 hours per day, including travel from home to the office.
- I work around 46 weeks per year
- I am single
- I am 38 years old
- I don't have a car
- my total weekly expenses (Schedule E) are generally £85
Being clueless as to the finer details of IR35, I long ago chose an umbrella solution, simply because the 'net pay calculator' promised massive increases to my net pay.
What a joke. My weekly net pay with this umbrella company is slightly under £900.
As a PAYE employee of my agency, however, I would apparently be earning around £1,000.
Am I missing something important here, or are many of us contractors simply throwing money down the tube by signing on to these umbrella and limited company schemes?
I am a contractor in a fairly typical contract situation and I'm trying to work out if there is any benefit at all in continuing to use any kind of umbrella or limited company solution to "maximise" my earnings. Because according to all my calculations, they are an appalling rip off, and I would be better off as a simple PAYE employee of my agency.
For the record, here are my circumstances:
- I am on an hourly rate of £37.5 with an IT company in London
- i work 40 hours per week
- I live in Berkshire and travel to work in London by train and tube (£75 per week). I work 13 hours per day, including travel from home to the office.
- I work around 46 weeks per year
- I am single
- I am 38 years old
- I don't have a car
- my total weekly expenses (Schedule E) are generally £85
Being clueless as to the finer details of IR35, I long ago chose an umbrella solution, simply because the 'net pay calculator' promised massive increases to my net pay.
What a joke. My weekly net pay with this umbrella company is slightly under £900.
As a PAYE employee of my agency, however, I would apparently be earning around £1,000.
Am I missing something important here, or are many of us contractors simply throwing money down the tube by signing on to these umbrella and limited company schemes?
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