View Full Version : Dilemma - Stay Permie or go contracting ... Please advise

11th September 2012, 19:46
Dear all,

I am in a dilemma of whether continue to be in perm position or go for contracting. My current situation is:
position - Permanent - IT manager in a consultancy
salary - 73K base, 10% company pension, upto 10% bonus, 30 days holidays, life insurance, medical/gym benefits. So total package comes to around 84K (73K base + benefits)
Age - 38 yrs
Location - London

Dilemma between the head and heart is:
Heart - Stick to perm (career progression)
Head - Go contracting (Money)

If I went contracting I will at the most get a rate of 450-500/day (outside IR35). I have heard varied % for take home ranging from 68% (limited contany) to 86% (loan through trusts etc).
Not sure if it's worth going for contracting? (If the contract take home is above 80%, it makes it more tempting).

Would really be grateful for your advice. Specially:
1> Whether it makes sense to go contracting (450-500/day) inspite of an 84K package.
2> Keeping all legal and not taking too much of risk (normal/standard risk is ok), how much is the % take home generally for a 450-500/day rate (outside IR35), 10 months per year?
3> Any success stories or nasty experiences?

Would really appreciate your responses/guidance/advise.

Thanks in advance!


11th September 2012, 23:30
Also ... my total IT experience = 15 years

Support Monkey
12th September 2012, 08:03
Go contract and use a loan through trust company take your 86%, then in a couple of years time you can come back and tell us about how much you owe the tax man in back tax

The Spartan
12th September 2012, 08:17
Contracting isn't all about money you know, it's a lifestyle. You're not stuck in one place for too long if you don't want to be and you don't have to put up with the usual office politics and get varied work in my case anyway.

12th September 2012, 08:35
You don't say much about your motivation's for going contracting. Is it purely about the money that you assume you can make? If it is, the only way to be sure how easy it is to find a contract at the rate you are looking for is to go out and land one. Be warned that it is often easier to land the first one as you can sometimes utilise contacts etc. What I found more difficult is landing about contract number 3, i.e. when you have exhausted favours etc.

What's the impact likely to be on family members etc? Are you prepared to work anywhere in Europe? Also, as you have been a manager for your last role, what type of roles would you be looking for?Do you have anything niche, really current in your skill set? Have you thought about how you would maintain any "edge" you currently may have?

The Spartan
12th September 2012, 08:48
These are all good raised by fckvwls I'm only on my second contract and I'm currently in Zurich luckily I'm a tester and have a very varied skillset. You need to set yourself apart from the competition as a contractor to ensure a steady flow of contracts and assume you're only going to work for 46 weeks out of the year.

12th September 2012, 12:09
Chat to a friendly accountant and you'll get pretty good figures so if your decision is to be ruled on money, you'll have the right info.
we do tax planning with all new clients (and anually for our existing), taking into account all other sources of income you (and your spouse/partner) has so we can give practical answers.
Spartan makes a good point - we suggest you consider 46 weeks income a year - everyone needs a holiday!
And how long this contact will last, how easy to get future contracts etc?
You will almost certainly make more money contracting, but if there are down times or you become ill, there are no employee benefits to fall back on so if you do choose this make sure you get that covered. Again a decent accountant will point you in the right direction.
Finally, it's not all about the money, you'll have director responsibilities and it will no doubt be a big lifestyle change too.
Whatever you decide good luck :)

12th September 2012, 13:55
I would stay on that perm package if I were you.