Are contracts more or less the same when comparing Umbrella to Outside IR35? Are contracts more or less the same when comparing Umbrella to Outside IR35?
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    Default Are contracts more or less the same when comparing Umbrella to Outside IR35?

    Thinking on the other side of the fence, if I have a contractor that just walks out the door upon a blanket inside determination and I have to put their contract out to the market as 'umbrella only'. I'd certainly want a 4 week notice period instead of the usual 1 week (maybe 2) either way etc.

    I mean, a good experienced contractor is going to leave the first chance he gets. No?

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    No.

    And you can have an outside contract via an umbrella so your comparison isn't very good. Need to be a bit clearer.
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    Fine.

    You know the scenario well enough, but I'll make it simpler. Client change policy, no more PSCs. Said PSC has contract terminated, client go out to market with same contract but to engage on that contract via an umbrella, pay is a perm equivalent.

    Are you stating No due to expected professional courtesy or reputation? I can't see that applying to many (and yes, this includes brilliant technical consultants that don't want to be taken for a ride).

    I'm not a hirer, but just relying on that fact that currently "where else are you going to go?" is a risk to continuity on projects of any size.

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    With umbrella you have a contract of employment. You don't have a contract with the client. That's between the brolly and the client. So it will be very different.

    Shouldn't be perm equivalent though. Should still be same daily rate or there abouts.
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    The pay isn't a perm equivalent though. A permie doesn't pay apprenticeship levy, employers NI, or an umbrella margin.

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    Quote Originally Posted by northernladuk View Post
    With umbrella you have a contract of employment. You don't have a contract with the client. That's between the brolly and the client. So it will be very different.
    Yes, but for the notice period it will all be mirrored, so for the question, it makes no difference. Yes, the umbrella COULD say I have to give 4 weeks notice where the client have agreed 1 week with the umbrella. But that seems highly unlikely, it appears very likely it'll just be a mirror of the client to umbrella for notice terms. Hence the original Q.

    Quote Originally Posted by northernladuk View Post
    Shouldn't be perm equivalent though. Should still be same daily rate or there abouts.
    Same rate as before but reductions for apprenticeship levy, employers NI, umbrella margin, versus top end perm offer with bonus benefits etc? Is it so unfair to say it'll work out to an equivalent perm rate? Yes, guesswork, but still.

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    Quote Originally Posted by LetterBox View Post
    Yes, but for the notice period it will all be mirrored, so for the question, it makes no difference. Yes, the umbrella COULD say I have to give 4 weeks notice where the client have agreed 1 week with the umbrella. But that seems highly unlikely, it appears very likely it'll just be a mirror of the client to umbrella for notice terms. Hence the original Q.
    I don't think it will be mirrored. They may turn out to be the same but this isn't by design. The contract between client and umbrella is for that piece of work. The notice between you and brolly is for you leaving their employment however many different contracts you do. Neither are in anyway related.

    You would negotiate the notice period of the contract as you would normally whilst getting the gig. It's not often contractors have been able to influence a clients notice period at the best of times so I'd imagine it's even harder when the client is well aware you are trying to drop the period so you can jump ship more easily.
    Same rate as before but reductions for apprenticeship levy, employers NI, umbrella margin, versus top end perm offer with bonus benefits etc? Is it so unfair to say it'll work out to an equivalent perm rate? Yes, guesswork, but still.
    Yes it is unfair. Again, you are comparing apples and pears. Perms earn say 50k+benefits. You earn say £500. Completely different animals. The fact the two rates come out of at the same at the end is coincidence. It would be a bloody miracle as well. Inside IR35 at £500 is still way more than a perm.

    Take out the guesswork and have a look at some of the calculators on here. With 8 weeks to go it's not the time for guess work anymore.

    Put 500 in per day outside and it will tell you what you need to earn as a perm. You'll quickly see there is no way they are close.
    Last edited by Contractor UK; 28th June 2020 at 14:50.
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    Quote Originally Posted by northernladuk View Post
    I don't think it will be mirrored. They may turn out to be the same but this isn't by design. The contract between client and umbrella is for that piece of work. The notice between you and brolly is for you leaving their employment however many different contracts you do. Neither are in anyway related.
    Ok, understood, I just think reality for the most part will be a mirror.

    Quote Originally Posted by northernladuk View Post
    You would negotiate the notice period of the contract as you would normally whilst getting the gig. It's not often contractors have been able to influence a clients notice period at the best of times so I'd imagine it's even harder when the client is well aware you are trying to drop the period so you can jump ship more easily.
    Agree, but my thoughts were the reverse (hence initial post), the client placing a false 4 week notice period on a position you know by experience or digging is usually only 2. It should be easy enough to convince a client to return to the usual 2 week if you sell it correctly and look very unlikely to jump.

    Quote Originally Posted by northernladuk View Post
    Yes it is unfair. Again, you are comparing apples and pears. Perms earn say 50k+benefits. You earn say £500. Completely different animals. The fact the two rates come out of at the same at the end is coincidence. It would be a bloody miracle as well. Inside IR35 at £500 is still way more than a perm.

    Take out the guesswork and have a look at some of the calculators on here. With 8 weeks to go it's not the time for guess work anymore.

    Put 500 in per day outside and it will tell you what you need to earn as a perm. You'll quickly see there is no way they are close.
    Not sure you can base 50k+benefits to £500, but there are many variables obviously. I've known £400 contractors jump into perm for over 70k+benefits, recently a £620 contractor jumped into perm for over 100k+benefits. I've worked at £500 with guys on 80k base+bonus benefits etc.

    I have used those calcs, the results are the same as ever, I'm better off as an outside IR35 contractor, but it's not a night and day difference.

    And given your £500, outside IR35 it'll be £121,647, an incredibly unlikely perm salary for a £500 role, inside IR35 with all those lovely costs incurred from those 'costs neutral' clients it'll be around £97,000. 80k base + 10-15% bonus + benefits. There isn't a lot in it.

    Caveat to the above being that maybe permie salaries drop for those positions due to over supply of ex-contractors looking for perm themselves. This may well make inside IR35 rates look ok in comparison, but for now the gap has tightened from what I am seeing and those who I know have made moves over the last 2 years.
    Last edited by Contractor UK; 28th June 2020 at 14:50.

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    Quote Originally Posted by LetterBox View Post
    Ok, understood, I just think reality for the most part will be a mirror.
    As stated that's purely a coincidence but whatever.
    Agree, but my thoughts were the reverse (hence initial post), the client placing a false 4 week notice period on a position you know by experience or digging is usually only 2. It should be easy enough to convince a client to return to the usual 2 week if you sell it correctly and look very unlikely to jump.
    I doubt it will be a false 4 week notice. It's what they want. If they want 4 weeks it's 4 weeks. Not sure how digging will find it's 2. It's set by them. But fill your boots.

    Not sure you can base 50k+benefits to £500, but there are many variables obviously. I've known £400 contractors jump into perm for over 70k+benefits, recently a £620 contractor jumped into perm for over 100k+benefits. I've worked at £500 with guys on 80k base+bonus benefits etc.
    You can't and that's my point. You said 'it'll work out to an equivalent perm rate' and I'm showing you it won't. They are different beasts. Perms can earn 50k but contractors can do the same gig for £500. So nowhere near perm rate as you stated.


    I have used those calcs, the results are the same as ever, I'm better off as an outside IR35 contractor, but it's not a night and day difference.

    And given your £500, outside IR35 it'll be £121,647, an incredibly unlikely perm salary for a £500 role, inside IR35 with all those lovely costs incurred from those 'costs neutral' clients it'll be around £97,000. 80k base + 10-15% bonus + benefits. There isn't a lot in it.
    Not in my experience. My last gig was £425 in Manchester doing a role I know full well is 50-55k for perms. I do see plenty of posts on here where people are being offered the money you quote but certainly not true in Manchester. I've been watching for suitable perm roles and not seen anything over £60k in 4 months. Guess it depends what you do, where and how much the client wants you.
    Caveat to the above being that maybe permie salaries drop for those positions due to over supply of ex-contractors looking for perm themselves. This may well make inside IR35 rates look ok in comparison, but for now the gap has tightened from what I am seeing and those who I know have made moves over the last 2 years.
    I must admit I don't think clients will purposely drop rates because of it. It will only lead to HR problems later so very short sighted. If they have a rate card for £50k I'm pretty sure most will stick to that. Larger ones that is. Maybe small companies will take advantage but they still want to get the best in so have to keep the rate up.
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    Quote Originally Posted by northernladuk View Post
    Not in my experience. My last gig was £425 in Manchester doing a role I know full well is 50-55k for perms. I do see plenty of posts on here where people are being offered the money you quote but certainly not true in Manchester. I've been watching for suitable perm roles and not seen anything over £60k in 4 months. Guess it depends what you do, where and how much the client wants you.
    I see, my south east location has skewed my impression of perm salary / freelance rate then, yes it'll depend on what you do to a certain extent, but a 50k perm for me would equate to a 275, maybe 300 rate. Whilst I also said the inside vs perm was now very close, I also excluded potential bench time. Certainly a 425 inside rate is still better than a 50-55k perm.

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