IR35 - Tell Me What to Do!

[JoJoGabor]

My situation is pretty similar to yours, but Im on 550/day locally, and have 3 kids, Mrs who doesnt work as its not worth it due to childcare costs (She was a teacher)

So Im about to accept a permie role at £100k plus bonus. Its still a drop in take home, but my hope/intention is to do this for 18 months then go back contracting if its still viable, Im sure it will be

[fiisch]

Thank you for the replies all - that's helpful.

It's not a vast, vast difference in take-home, especially when consider the confusing IR35 burden is lifted, but I think it's enough to tip the balance i.e.: added income of contractor versus reduced security.

One added question:

1. If my current client decided to blanket assess their contractors as inside IR35, which I fear they will, and I was to accept and continue, if HMRC came knocking for period outside IR35, would QDOS IR35 cover still apply? Or would I have essentially voided the policy as I have undermined any potential defence by subsequently accepting the role as inside? Suspect the latter...

My situation is pretty similar to yours, but Im on 550/day locally, and have 3 kids, Mrs who doesnt work as its not worth it due to childcare costs (She was a teacher)

So Im about to accept a permie role at £100k plus bonus. Its still a drop in take home, but my hope/intention is to do this for 18 months then go back contracting if its still viable, Im sure it will be

I'm surprised you're thinking like that with the numbers involved - presumably your reasoning is more than just numbers? On my current £500 p/d, if I found job locally, £70-80k would be about the tipping point for me to accept permanent long-term. I'd have thought £100k plus bonus with holiday, sick pay and permie benefits is ultimately the same if not higher take-home...?!

[NCo]

Contracy - Perm transition

Thank you for the replies all - that's helpful.

It's not a vast, vast difference in take-home, especially when consider the confusing IR35 burden is lifted, but I think it's enough to tip the balance i.e.: added income of contractor versus reduced security.

One added question:

1. If my current client decided to blanket assess their contractors as inside IR35, which I fear they will, and I was to accept and continue, if HMRC came knocking for period outside IR35, would QDOS IR35 cover still apply? Or would I have essentially voided the policy as I have undermined any potential defence by subsequently accepting the role as inside? Suspect the latter...



I'm surprised you're thinking like that with the numbers involved - presumably your reasoning is more than just numbers? On my current £500 p/d, if I found job locally, £70-80k would be about the tipping point for me to accept permanent long-term. I'd have thought £100k plus bonus with holiday, sick pay and permie benefits is ultimately the same if not higher take-home...?!

I'm in a similar position, received a 100K perm offer which I've turned down as I really like contracting life(for now).

Running the numbers, the perm offer is financially lower than a 550 per day contractor salary. I have kids and my spouse doesn't work which allows me to put her as shareholder, so the situation might be different to yours, but this is how I calculated it:
* Current setup allows us to qualify for the 30% child care discount. Perm role of £100k disqualifies us - loss of roughly 3k a year.
* Current setup allows us to to avoid the HICBC. Perm role of £100k disqualifies us - loss of £1800 a year.
* UK doesn't allow perm to deduct commute cost, so effectively a loss of £2k a year off my net.
* The remaining company funds can be put towards pension (my perm offer was 5%) and increasing my war chest(already approaching 4 months on the side, which is more than the 2-3 months offered in perm).

Just my 2c.

N.

[EvilGazebo]

I'm in a similar position, received a 100K perm offer which I've turned down as I really like contracting life(for now).

Running the numbers, the perm offer is financially lower than a 550 per day contractor salary. I have kids and my spouse doesn't work which allows me to put her as shareholder, so the situation might be different to yours, but this is how I calculated it:
* Current setup allows us to qualify for the 30% child care discount. Perm role of £100k disqualifies us - loss of roughly 3k a year.
* Current setup allows us to to avoid the HICBC. Perm role of £100k disqualifies us - loss of £1800 a year.
* UK doesn't allow perm to deduct commute cost, so effectively a loss of £2k a year off my net.
* The remaining company funds can be put towards pension (my perm offer was 5%) and increasing my war chest(already approaching 4 months on the side, which is more than the 2-3 months offered in perm).

Just my 2c.

N.

Problem is you're comparing perm with contracting outside. Which is fine if you are confident you will still be able to secure outside gigs post April. If you can't and end up inside, all the advantages you outline will disappear.

I'm on £700/day, split divs with spouse etc so perm at £100k would be a major pay cut. But I'm still going after a circa £100k perm job I turned down previously because the world isn't going to be what it was.anymore.

[northernladuk]

Contracting life may not exist as you know it now in 5 months. I'd be taking that job in a heartbeat.

[TygerTyger]

Contracting life may not exist as you know it now in 5 months. I'd be taking that job in a heartbeat.

Snap - would jump at 100k

I'm in similar position to others on this thread - similar rates and situation with split dividends with spouse, child benefit etc.

Getting offered top 60-65k ish to go perm. Think staying contracting and accepting the upcoming bumpy ride and future umbrella/PAYE hit is probably more appropriate for me currently but at 80k basic I'd flip over I think.

[DeludedKitten]

Problem is you're comparing perm with contracting outside. Which is fine if you are confident you will still be able to secure outside gigs post April. If you can't and end up inside, all the advantages you outline will disappear.

I'm on £700/day, split divs with spouse etc so perm at £100k would be a major pay cut. But I'm still going after a circa £100k perm job I turned down previously because the world isn't going to be what it was.anymore.

It's also comparing £550 a day for lots of days of the year against the permie salary that you'll get whether there is work for you to do or not.

I've not had a sniff of a contract in six months now, so £100k is a big increase on the £590 that I was charging my last client.

[hairymouse]

Contracting life may not exist as you know it now in 5 months. I'd be taking that job in a heartbeat.

I'm not even sure it exists as we once knew it now, much less in 5 months. The market is already unrecognisable, and not in a good way.