Contracting with weekly commute, does it pay?

[Ignis Fatuus]

Faced with a possible contract in the Netherlands, I looked at it a bit.

Work in NL, continue living in the UK. The Dutch insist that I use a Dutch umbrella company and pay tax in NL. Apart from the cost, the lack of flexibility, and the impossibility of contributing gross to a SIPP, there is the problem of expenses. I usually manage to keep the expenses down to £1600 a month. But the Dutch wouldn't let me claim expenses - however you can apply for the 30% tax-free allowance which is supposed to cover all that.

So far so good, but I am resident in the UK and so subject to UK income tax. While HMRC will give a credit of tax paid in NL, they will calculate UK tax based on the total income, not giving me a 30% allowance. Nor will HMRC allow expenses, because I will be "employed" and NL will be my "place of employment" so travel to there is not allowable. So there will be more tax to pay in the UK on top of in NL, and all expenses will be out of my own pocket.

After taxes and actual expenses, I calculate less than £3000 a month in my pocket (and that's it: no warchest, no SIPP, no dividends etc).

OK it's an income, but if I am in contract for 8 months of the year, that equates to a salary of £32k, with no benefits whatever. If 7 months in a year, which seems not unlikely these days, £28k per year. Less in practice if contracts are short, because travel costs more at the start and end because of booking at short notice.

I am beginning to think that contracting with travel is not a viable career.

[MarillionFan]

£3000 is too little for me. I try to ensure I take home mininum £6k average per month(over the year) after travel expenses/tax/corp/business expenses, For £3000 may as well go perm.

[Ignis Fatuus]

£3000 is too little for me. I try to ensure I take home mininum £6k average per month(over the year) after travel expenses/tax/corp/business expenses, For £3000 may as well go perm.

Exactly. Might as well be a Macdonalds graduate trainee manager (great benefits too).

[MarillionFan]

Exactly. Might as well be a Macdonalds graduate trainee manager (great benefits too).

It's McDonalds. You'll never even get an interview if you can't even get the company name correct.

[Old Hack]

We're a two person operation and manage to get out 78% of our money.

£32k isn't worth the hassle, unless you are new ot the business and want their name on your cv.

[Ignis Fatuus]

It's McDonalds. You'll never even get an interview if you can't even get the company name correct.

Darn, busted! Usually I'm fastidious to what some people might think of as pedantic, but I got sidetracked thinking about a Big Mac....

[geoffreywhereveryoumaybe]

If you get a good rate and flexibility

I am commuting weekly to Scandinavia and to make it worth my while I negotiated flexibility ie out Monday home Wednesday and negotiated a rate that doubled what I was on in the UK.

That way, you don't end up working too many days, can manage with my UK limited company and eases the pain of a long weekly commute.

Flexible working agreements are key with working from home the rest of the week

[Old Hack]

I am commuting weekly to Scandinavia and to make it worth my while I negotiated flexibility ie out Monday home Wednesday and negotiated a rate that doubled what I was on in the UK.

That way, you don't end up working too many days, can manage with my UK limited company and eases the pain of a long weekly commute.

Flexible working agreements are key with working from home the rest of the week

It's the Netherlands, and they will not allow uk Ltds to operate I believe. I turned down a job there the other month, due to the same issue. They do believe they can realise 69%, but they wanted too much control (the agency).

[Ignis Fatuus]

We're a two person operation and manage to get out 78% of our money.

£32k isn't worth the hassle, unless you are new ot the business and want their name on your cv.

Which is not the case. I just want to work.

Basically the worst-of-both-worlds taxation combined with the inability to claim expenses makes this arrangement worse than an umbrella.

I suppose the conclusion is that, although I like NL, in my circumstances it needs to be downgraded to an "if I really must" location. It's too expensive otherwise (and doesn't pay correspondingly more).

[Ignis Fatuus]

geoffreywhereveryoumaybe, I agree, and indeed I have negotiated Mondays off for the NL contract, but I failed to negotiate a good rate so it's only half good.

Old Hack, for me it's not just the need to use a Dutch umbrella, it's the 2-country Catch-22 tax situation and the high cost of expenses (If I just rented a flat there and stayed there instead of coming home every weekend I could do it).