Moving from Permy to Contract
Discussion
I may have the opportunity to move into a contracting role. Top line is a little bit less than what I am on now, but I am sure there would be more benefits to going contracting?
Would I be able to claim back a mileage allowance? (where I live and where the role are are fairly far apart).
Would there be any other benefits to moving to a contracting role?
Sorry for the questions.
Thanks.
Would I be able to claim back a mileage allowance? (where I live and where the role are are fairly far apart).
Would there be any other benefits to moving to a contracting role?
Sorry for the questions.
Thanks.
By "top line" do you mean your current gross salary, and 220-ish days x suggested day rate is less?
If so then IMHO most people would be quite a lot worse off financially, especially post April 2016.
If you want to run your own business, with the flexibility to only take the work you want to do (which might even involve multiple clients simultaneously) then that is biggest benefit of contracting.
If you are doing it purely for financial reasons then a ratio that looks more like £100k+ package versus £800/day contract rate is perhaps a good yardstick, although that contract figure might need to increase as Osborne continues to squeeze.
There are avenues you can pursue to work things in your favour, especially if you can live as a lower rate tax payer.
Having said all that, I left an £85k role for a short term contract and on paper an effective 20% cut many years ago... but I had pretty much hit the ceiling doimg what I wanted as a permie and was planning for the longer term as I didn't want the traditional managerial career.
If so then IMHO most people would be quite a lot worse off financially, especially post April 2016.
If you want to run your own business, with the flexibility to only take the work you want to do (which might even involve multiple clients simultaneously) then that is biggest benefit of contracting.
If you are doing it purely for financial reasons then a ratio that looks more like £100k+ package versus £800/day contract rate is perhaps a good yardstick, although that contract figure might need to increase as Osborne continues to squeeze.
There are avenues you can pursue to work things in your favour, especially if you can live as a lower rate tax payer.
Having said all that, I left an £85k role for a short term contract and on paper an effective 20% cut many years ago... but I had pretty much hit the ceiling doimg what I wanted as a permie and was planning for the longer term as I didn't want the traditional managerial career.
Moving to contracting to earn less?? Sorry but you are doing it wrong. 
The few allowances you can claim as a contractor are far outweighed by the benefits you get as a permie, holiday pay, life insurance, sick pay, private healthcare all go out the window, not to mention Osborne seems set on closing off any allowable expenses for contractors in the not too distant future. Plus you have to factor in time when you may be out of contract, on leave etc so if you aren't working, you aren't earning.
So unless your contracting rate means you'll be earning substantially more than an equivalent permie role, I'd stay put.
The few allowances you can claim as a contractor are far outweighed by the benefits you get as a permie, holiday pay, life insurance, sick pay, private healthcare all go out the window, not to mention Osborne seems set on closing off any allowable expenses for contractors in the not too distant future. Plus you have to factor in time when you may be out of contract, on leave etc so if you aren't working, you aren't earning.
So unless your contracting rate means you'll be earning substantially more than an equivalent permie role, I'd stay put.
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