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£50/hr compared to £52k salary... pension, holidays, etc

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    #11
    Originally posted by fatbadger View Post
    Hello
    I've never contracted but I've been offered a 12 month contract on £50/hr so £400/day making = 40 h x £50 x 46 weeks (i.e. knock off 6 wks hols) = £92k
    My current employer pays me £52k but they also pay in ~£10k into a pension and obviously I get 6 weeks paid holiday (about £6k), so that salary is more like £68k (is that right calculation??)
    You have double counted the holiday pay here by only factoring in 46 weeks at contract rate. The comparison is £92k/year vs £62k/year. You may also pay less tax as a contractor depending on circumstances. It's easy to underestimate the difference between these incomes but if your overheads (rent, food etc) are say £25k/year then your disposable income will be 2 times what it is currently.

    I would say it is worth it but depends on how much risk you are prepared to take. At the end of 12 months you are then an established contractor and should be able to command a higher rate.

    Find out if the agency is on a fixed commission or not. It may be possible to negotiate the rate up, if you ask for £450 you might get £425.

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      #12
      Originally posted by fatbadger View Post
      Thanks very much the the feedback. I don't know what is meant be inside or out (not weather related lol?).
      Having read a bit I don't imagine ir35 would affect me as i'd setup as Ltd and not use an umbrella company.
      The headline 100k/yr (£50/hrx40hrsx52) sounds good, but once I factor in all the risks and expenses it really doesn't sound too good at all then!
      I think £1000/day and I'd be there. Is that every paid?
      Oh and no, I have no savings and a month with no pay (at the start) would bankrupt me though after a few months on that fee I'd then have a buffer. I am medical eng end of mechanical and the job is so ficussed on a tiny particular skill set, so I really don't think they'd have a massive pool of people to choose from... It was an agency who called me via linkedin and I know who theyre acting for: Is it bad form to just go direct to that person and ask them to hire me, cut out the middle man etc??

      Cheers
      Ir35 isn’t determined by whether you choose ltd or umbrella, if you are inside ltd will not be an option

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        #13
        Originally posted by fatbadger View Post
        I don't know what is meant be inside or out (not weather related lol?).
        Having read a bit I don't imagine ir35 would affect me as i'd setup as Ltd and not use an umbrella company.
        Cheers
        I'd read up a bit more

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          #14
          Originally posted by fatbadger View Post
          Thanks very much the the feedback. I don't know what is meant be inside or out (not weather related lol?).
          Having read a bit I don't imagine ir35 would affect me as i'd setup as Ltd and not use an umbrella company.
          You really will have to look this up as I've heard that some of the major engineering companies ARE gearing up for IR35, and not in a good way for contractors (and that includes ALL contractors, be they Mechanical, Engineering or Software...).
          "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
          - Voltaire/Benjamin Franklin/Anne Frank...

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            #15
            Originally posted by jk3838 View Post
            I'd read up a bit more
            Brilliant!

            Its a subjective law. As I read it it sounds like they want to capture people working in all but name as permanent. If you're a genuine contractor and in a job less than 2 years, seems doubtful ir35 would apply, but I know literally nothing until few days ago.

            If you know more, please enlighten everyone

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              #16
              Originally posted by fatbadger View Post
              Brilliant!

              Its a subjective law.
              the law isn't subjective. It might be an ass, but it's not subjective.
              It's just hard to interpret and hence appears to be subjective.
              Judges, who make final decisions, make objective decisions based on the letter of the law, precedence and the facts of the case.

              Lay persons' interpretations are likely to be very subjective though, and that includes HMRC inspectors, agencies and contractors themselves.

              /pedant

              Originally posted by fatbadger View Post
              As I read it it sounds like they want to capture people working in all but name as permanent.
              pretty much.


              Originally posted by fatbadger View Post
              If you're a genuine contractor and in a job less than 2 years, seems doubtful ir35 would apply, but I know literally nothing until few days ago.

              If you know more, please enlighten everyone
              yes if you're a genuine contractor.... but can you define precisely what that is? IR35 tries.
              2 years is immaterial to whether you're a disguised employee or not. Although it could be an indicator that you have become a disguised employee along the way (known as becoming part and parcel)
              See You Next Tuesday

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