New analyst role

[dbred10]

Hi,
I was wondering if I could have some advice on starting out on contracting.
I’ve been working for a NHS trust for 3 years as a permanent staff and have recently handed in my notice. The trust wants to keep me and I’ve told them I can come back as a contractor doing exactly the same thing.
If I’m going to work in the same role as before, would that class me to be in ‘relevant engagements’ part of the IR35? Which probably means I should go via an umbrella company?
As this would be my first experience as a contractor, is it better for me and the trust to go through an agency rather than a direct contract? I’ve heard the agency can invoice the client but how much roughly would this eat into my earnings? 5%
Is there anything else I should be aware of?
Thanks

[stek]

New analyst role

You need to at least double your rate get to back what you lose by not being permie.

[northernladuk]

If you are going to do it leave and do it properly and go get a proper contract IMO. By going back to your old client you have no benefits or security and when you do get binned you are going to be in the big wide world with no warchest, no clue what to do and no idea what contract is really about.

Why did you tell them you will come back as a contractor without actually having a clue about contracting? You are effectively giving them the ability to bin you when they want with no HR or employment laws to back you up and zero benefits. Sounds more like a double barrel to the left foot to me.

[jamesbrown]

Hi,
I was wondering if I could have some advice on starting out on contracting.
I’ve been working for a NHS trust for 3 years as a permanent staff and have recently handed in my notice. The trust wants to keep me and I’ve told them I can come back as a contractor doing exactly the same thing.
If I’m going to work in the same role as before, would that class me to be in ‘relevant engagements’ part of the IR35? Which probably means I should go via an umbrella company?
As this would be my first experience as a contractor, is it better for me and the trust to go through an agency rather than a direct contract? I’ve heard the agency can invoice the client but how much roughly would this eat into my earnings? 5%
Is there anything else I should be aware of?
Thanks

Yes, squarely inside. This may be your first experience at getting shafted, but not your first experience at being a contractor.

BTW, what was your intention when handing in your notice? It's unclear if it was to continue the same role in contract or do something else but, if the latter, why not just do it?

[Wanderer]

I’ve been working for a NHS trust for 3 years as a permanent staff and have recently handed in my notice. The trust wants to keep me and I’ve told them I can come back as a contractor doing exactly the same thing.

You can, but you would get caught by IR35 and pay a huge amount of tax as well as losing any permie benefits like sick pay, pension, annual leave, redundancy payoff etc.

If they want you to stay that badly then why don't you ask for a payrise and stay on as a permie?

My advice is that if you want to go contracting then you have to make a clean break of it from your previous employer.

[dbred10]

Thanks for all your replies.

Yup I've asked more or less to double my rate.

If you are going to do it leave and do it properly and go get a proper contract IMO

Proper contract as in via an agency? I would settle for 2 months so I'll try and force this into the contract.

I offered as they were only going to get a contractor in and the organisation has more contractors and perms so i thought I might as well try and see if they want me back as a contractor.

what was your intention when handing in your notice? It's unclear if it was to continue the same role in contract or do something else but, if the latter, why not just do it?

My intentions were to just give myself a bit of a break from work, perhaps find something else or even travel a bit if I don't. But then they told me they wanted to get a contractor in so I asked about if they would have me back as one.

If they want you to stay that badly then why don't you ask for a payrise and stay on as a permie?

They are very backwards, they were unable to give me a payrise as I am on the agenda for change pay scales and I am on top of my banding. They won't change the structure but they are OK to hire contractors.

I am very keen on this but I don't want to end up paying a shed load of tax because of my inexperience to know what is best for me. Would you suggest go via the umbrella route, as you mentioned I would pay a lot of tax if caught?

[dbred10]

Thanks for the link Wanderer.

When I looked at the Monthly Take home pay at the bottom of your link, i did wonder how I would get less but realised it's based on Total Income After All Taxes / 12.

If it is say a 2 months contract, it would be the equivalent to 7 months as a perm at my current wage. To me this sounds good and it would definitely give me the ability to travel when there's a dry period. I won't be travelling for longer than 4 months so as long as I can pick up either a permanent role or another contracting job when I'm back, that would put be back on track with my original plan

[malvolio]

Thanks for the link Wanderer.

When I looked at the Monthly Take home pay at the bottom of your link, i did wonder how I would get less but realised it's based on Total Income After All Taxes / 12.

If it is say a 2 months contract, it would be the equivalent to 7 months as a perm at my current wage. To me this sounds good and it would definitely give me the ability to travel when there's a dry period. I won't be travelling for longer than 4 months so as long as I can pick up either a permanent role or another contracting job when I'm back, that would put be back on track with my original plan

No, it isn't. If you're on £30k now, you need £250 a day just to stand still in terms of net take home, and for that you are trading a whole raft of benefits (pension, sick pay, holidays, bank holidays, shift rotas, on call, blah-di-blah) and gaining zero job security. And if you do a nice easy two months pseudo contracting, then take a four month break, when you come back you're unemployable since you have zero history of either contracting or delivery.

So, want to try again?

[MB1983]

No, it isn't. If you're on £30k now, you need £250 a day just to stand still in terms of net take home,

Just checked with some online calculators. Monthly net pay on £30k annual salary is £1,935 and monthly net pay via umbrella company at £250 day-rate is £3,062 (with no expenses taken into account).

[eek]

Just checked with some online calculators. Monthly net pay on £30k annual salary is £1,935 and monthly net pay via umbrella company at £250 day-rate is £3,062 (with no expenses taken into account).

because that £1127 has to cover:-

holidays (6 weeks or over 10%)
illness
employer pension contributions
risk of no contract.....