Inside vs outside IR35 contracts

[ShandyDrinker]

Given the impending private sector off-payroll rollout, a simple poll and something of a conundrum (for me at least).

The question, if you have a choice between 2 contracts, one inside (or umbrella, PAYE, FTC) and paying well (say at least 1.5 times the outside contract), or the other outside, what would you do?

[malvolio]

Get all the correct numbers then do the sums.

aka It depends...

[ShandyDrinker]

Get all the correct numbers then do the sums.

aka It depends...

I agree. For me it has to be driven by the numbers. I am curious to know if there are people on here who will always take a die hard approach, with contracts being always outside.

For context, in the run up to the failed off-payroll rollout in April 2020, I was prepared to take a hardline stance and as a result was out of contract for a couple of months as I wasn't prepared to go umbrella at all. While it ended up being the right thing to do as I ended up getting another outside contract, this year for me it isn't so cut and dried.

The reality is we've got to be pragmatic and potentially staying out of work on a point of principle isn't where I'm at.

[Fraidycat]

I selected NEVER.

Obviously if i was almost broke then i would have to take whatever i can get but would go Perm first before an inside gig.

Im not going to pay 46% to the tax man, especially if its a high rate. 850 a day is almost 100K in tax.

And those high rate contracts are either going to be really hard work or really rubbish work (they cant find anyone who wants to do them for a lower rate).

Either way you suffer while paying a shed load in tax.

Better to find a good outside contract at a lower rate eg. 600 a day. Even go down to 500 if i had to.

[eek]

Get all the correct numbers then do the sums.

aka It depends...

And remember expenses probably won't be deductible from your pre-tax income.

[northernladuk]

I selected NEVER.

Obviously if i was almost broke then i would have to take whatever i can get but would go Perm first before an inside gig.

Im not going to pay 46% to the tax man, especially if its a high rate. 850 a day is almost 100K in tax.

And those high rate contracts are either going to be really hard work or really rubbish work (they cant find anyone who wants to do them for a lower rate).

Either way you suffer while paying a shed load in tax.

Better to find a good outside contract at a lower rate eg. 600 a day. Even go down to 500 if i had to.

Glad to see you know what you are talking bout... Oh.. No you don't. Carry on.

[ShandyDrinker]

And remember expenses probably won't be deductible from your pre-tax income.

Too true. This does seem to be forgotten by many. Although I am within commuting distance of London, it's right on the edge of being doable on a daily basis. I suspect that for many, London now won't be a viable prospect, or indeed anyone not living close to a significant source of contract work. I imagine it's slim pickings for anyone as a contractor living in the depths of Cornwall or the Scottish Highlands.

[Hairlocks]

Currently next gig is going to be inside, but WFH so no expenses. I can't see me traveling for an inside gig

[ShandyDrinker]

Currently next gig is going to be inside, but WFH so no expenses. I can't see me traveling for an inside gig

I would certainly be no longer prepared to do any contracts requiring working away from home for extended periods as I have done in the past.

[TwoWolves]

Too true. This does seem to be forgotten by many. Although I am within commuting distance of London, it's right on the edge of being doable on a daily basis. I suspect that for many, London now won't be a viable prospect, or indeed anyone not living close to a significant source of contract work. I imagine it's slim pickings for anyone as a contractor living in the depths of Cornwall or the Scottish Highlands.

Most of us are now hoping that remote work becomes a thing, but that is a hope. Have to wait and see.

I would certainly be no longer prepared to do any contracts requiring working away from home for extended periods as I have done in the past.

This is going to cripple a lot of enterprises. It May force some to offer "outside" contracts but that may take some time to sink in.