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Converting permanent salary to sole trader day rate?

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    Converting permanent salary to sole trader day rate?

    Hi all,

    I've been offered a day rate of £191 to equate to a permanent salary of £40,000


    This seems to match what the calculators are saying, if I were OUTSIDE IR35. But I have moved from permanent to contractor for the same country, I would definitely be within IR35, if I were charging via an intermediary.

    I'm actually working as a sole trader. I can't find any calculators that deal with this as it's so uncommon.

    Can anyone please advise?

    Thank you
    Last edited by Contractor UK; 14 December 2019, 22:21.

    #2
    Is that a lot more than you were on? Doesn't seem much to give up your perm benefits for.
    'CUK forum personality of 2011 - Winner - Yes really!!!!

    Comment


      #3
      Conventional wisdom is that £40k salary is about £40 an hour outside IR35...
      Blog? What blog...?

      Comment


        #4
        My apologies

        I was on 40k - so the day rate I'm told is equivalent

        But that only seems to be true if I were invoicing through an intermediary, and outside IR35

        If I were inside IR35, the equivalent salary would actually be lower and I'm in effect getting a significant pay cut

        As a sole trader, I'm not sure!

        Comment


          #5
          So no more pension, holidays, sick and rights for the same money??
          'CUK forum personality of 2011 - Winner - Yes really!!!!

          Comment


            #6
            Sorry yes, good point, there is an uplift for those:

            253 working days after weekends

            - 25 holiday

            = 228

            40,000/228 = 175 per day


            So it's an uplift for the gross salary

            but I'm stuck on what the take home will be as a sole trader

            Comment


              #7
              Originally posted by PickledFishNChips View Post
              Sorry yes, good point, there is an uplift for those:

              253 working days after weekends

              - 25 holiday

              = 228

              40,000/228 = 175 per day


              So it's an uplift for the gross salary

              but I'm stuck on what the take home will be as a sole trader
              But no pension, no sick pay, no training, no yearly wage increase and there must surely be other benefits gone for 3.5k extra a year?
              Last edited by northernladuk; 16 June 2019, 17:00.
              'CUK forum personality of 2011 - Winner - Yes really!!!!

              Comment


                #8
                Have you tried typing something like sole trader take home pay in to Google?
                'CUK forum personality of 2011 - Winner - Yes really!!!!

                Comment


                  #9
                  I have yes, and spent all day searching this forum and others, and despite seeing you chastise people for foolishly neglecting to read the newbie guides I gave it a go

                  I've found this which suggests 25% so if I consider that accurate I can compare to the calculators for Inside/outside IR35 and compare

                  There just doesn't seem to be a calculator that lets you switch between all 3 options of Inside/Outside IR35 and sole trader
                  Last edited by Contractor UK; 14 December 2019, 22:21.

                  Comment


                    #10
                    But they aren't equal choices. You wouldn't compare in/out AND sole trader. You are either in or out. In your case you won't be outside.

                    So you need either a brolly or sole trader calculator. Might be hard because you'll have to look at two websites.


                    Third result from a search for sole trader take home pay
                    Last edited by Contractor UK; 14 December 2019, 22:21.
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment

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