Offered a Contract, is it worth considering? Offered a Contract, is it worth considering?
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  1. #1

    Nervous Newbie


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    Default Offered a Contract, is it worth considering?

    I know I know, before you shoot me down in flames I should read up on IR35 and know the differences between Limited and via an umbrella etc. I will, but need to
    give a response this week to an offer.

    I contracted 8 years ago in banking for a long time via a Limited, it was great. Then decided to slow down and go perm with a great company and benefits, plus spend
    less time on trains and more with my kids. I don't fancy doing all the legwork of running the limited to be fair. A few days ago a competitor offered me a better role, but less money. Last week my client did almost the same once they heard I am open to a conversation. It came down to one thing..money. Why would I move anywhere for less ££.

    Now both have asked me if I'd contract so that I'd end up with more ££ and given me a rate. £500-£600 per day.

    This morning I was jumping on various sites who claim to give me a take home calculation. Some want me to sign up before I know the exact figures. I am already
    part way through the financial year, so know anything PAYE or Dividend will end up 40% taxed etc.

    I earn 120K per year, is it worth considering either contract at £600 a day? The calculators out there are telling me I'd be a few hundred quid better off, some (SJD) tell me
    I'd be 2K better off a month.

  2. #2

    Some things in Moderation

    cojak's Avatar
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    Quote Originally Posted by weboor View Post
    I know I know, before you shoot me down in flames I should read up on IR35 and know the differences between Limited and via an umbrella etc. I will, but need to
    give a response this week to an offer.

    I contracted 8 years ago in banking for a long time via a Limited, it was great. Then decided to slow down and go perm with a great company and benefits, plus spend
    less time on trains and more with my kids. I don't fancy doing all the legwork of running the limited to be fair. A few days ago a competitor offered me a better role, but less money. Last week my client did almost the same once they heard I am open to a conversation. It came down to one thing..money. Why would I move anywhere for less ££.

    Now both have asked me if I'd contract so that I'd end up with more ££ and given me a rate. £500-£600 per day.

    This morning I was jumping on various sites who claim to give me a take home calculation. Some want me to sign up before I know the exact figures. I am already
    part way through the financial year, so know anything PAYE or Dividend will end up 40% taxed etc.

    I earn 120K per year, is it worth considering either contract at £600 a day? The calculators out there are telling me I'd be a few hundred quid better off, some (SJD) tell me
    I'd be 2K better off a month.
    Oh Dear.

    Oh well, let's give this a go...

    1. Is this contract inside or outside IR35?
    2. Do you know what is happening with IR35 next April?


    If this is still in the banking sector, most banks have rolled over and are insisting that all contractors go inside IR35, that means that for a £600pd rate, you will end up with something just over £300.

    So really, you DO need to read the IR35 forum for more information, and find out that answers to the 2 questions above.

    Why would I move anywhere for less ££.
    Yes, my thought exactly, why indeed?
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make myself look wise and well read."
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  3. #3

    Fingers like lightning


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    And if a full year is done via the Inside IR35 contract, take home, by the looks of it, would roughly equate to the £120k pa salary, +/-~£10k.

    Might come down to benefits.

    However, cojak's questions above do need to be answered and factored in. Otherwise, at this stage, it's all guesswork.

    Good luck.

  4. #4

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    I'd forget the complexities.....

    £120k for a job you enjoy with a good work/life balance vs £600 a day.
    I'd stick with the £120k right now.

    If you're bored, and want to get back into the cut and thrust then do the contract, but not for the money.
    Assuming as a contractor you'd stay out of the higher rate tax, then you're take home will be more as a permie (income shifting to a spouse not inlcuded in that calculation). The xetra cash you build up in the company will be great for benchtiome, but you don't get benchtime in a permie job.
    See You Next Tuesday

  5. #5

    Contractor Among Contractors

    GhostofTarbera's Avatar
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    £120K all day every day

    You are mad to consider a £600 a day role that might end up within IR35 despite what’s promised now


    Sent from my iPhone using Contractor UK Forum

  6. #6

    Still gathering requirements...


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    Stick with what you're doing squire. After things calm down in the world of IR35 and general reforms then consider. You're on an excellent salary and I think we are going to see some movement on salaries offered for permanent jobs.

  7. #7

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    One other thing to bear in mind, slightly counter to the above, and is the same advice I'd give to anyone.

    If you're unhappy in your job, there's only so much you will get out of a pay rise. Ultimately you'll still be in a job you don't like.

  8. #8

    More time posting than coding


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    Quote Originally Posted by simes View Post
    And if a full year is done via the Inside IR35 contract, take home, by the looks of it, would roughly equate to the £120k pa salary, +/-~£10k.

    Might come down to benefits.

    However, cojak's questions above do need to be answered and factored in. Otherwise, at this stage, it's all guesswork.

    Good luck.
    This doesn't sound like a good deal.

    I think your calculation of coming off 2k better is wrong. If you umbrella (inside ir35) that amount, you'd be getting paid probably less given that the Employers NI is £15k on a £120,000 salary, and 220 (average working days) at £600 is 132000 and obviously less than £135,000 permy overall cost.

    If you are outside ir35, you may keep marginally more, but you'll be replacing it with zero benefits, you'll have expenses such as insurance and accountants, you will have downtime between contracts. It's not a good jump, and now isn't a great time.

    I'd be aiming for £800, given you're doing something that pays £120k as a perm, I assume there's a better market than what you're currently seeing. I'd wait until the new year, or more than likely after the IR35 doom comes.

  9. #9

    More time posting than coding


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    stick to the 120k. it's a no brainer.

  10. #10

    Double Godlike!


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    Bad time to go contracting, good salary. If you're bored at work, get a new hobby outside work.
    The greatest trick the devil ever pulled was convincing the world that he didn't exist

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