Contractors, Self Employed nice cars? You earn far too much!
Discussion
Nors said:
Economics Of Taxation
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100…
If they paid their bill the way we pay our taxes, it would go something like this…p
Our taxation system doesn't work that way though. A contractor (with his own limeted company) grosses 75k a year; a permie earns £70k a year gross. Which one contributes more in tax?Suppose that every day, ten men go out for beer and the bill for all ten comes to £100…
If they paid their bill the way we pay our taxes, it would go something like this…p
v8250 said:
mikey k said:
Other than road tax 
others is £485/yr But we love ours for the "stealth" I some times use it for work in place of the M135i if the weather is bad
Yes, £500/annum is a pseudo-pain so just amortize the cost into overall ownership...combined, there are few cars that come even close as 'package'. others is £485/yr But we love ours for the "stealth" I some times use it for work in place of the M135i if the weather is bad I went looking and eventually gave up after a close call with an SRT Jeep
plasticpig said:
Nors said:
Economics Of Taxation
Suppose that every day, ten men go out for beer and the bill for all ten comes to £100…
If they paid their bill the way we pay our taxes, it would go something like this…p
Our taxation system doesn't work that way though. A contractor (with his own limeted company) grosses 75k a year; a permie earns £70k a year gross. Which one contributes more in tax?Suppose that every day, ten men go out for beer and the bill for all ten comes to £100…
If they paid their bill the way we pay our taxes, it would go something like this…p
plasticpig said:
Our taxation system doesn't work that way though. A contractor (with his own limeted company) grosses 75k a year; a permie earns £70k a year gross. Which one contributes more in tax?
Not possible to tell. If the contractor's limited company pays out everything as PAYE they also get stiffed for the Employer's NI, which the employee never sees. And the costs of equipment, running the company and mandatory insurance has to come out of the contractor's limited company. You're not comparing like with like. Permies are provided with laptops, mobile phones, pensions, health insurance, car allowances, training -- all of which comes out of the £75k the contractor's company has. Somewhere I have a "cost of a permie" calculator and it's surprisingly high -- minimum of 70% over the employee's base salary, and that's in a very lean organization.plasticpig said:
Our taxation system doesn't work that way though. A contractor (with his own limeted company) grosses 75k a year; a permie earns £70k a year gross. Which one contributes more in tax?
But for the same role the contractor is likely to earn a lot more than than the permanent staff, not similar amounts as in your example. Then, even if using dividends it's quite possible for the contractor to pay more in tax than the permanent staff.wemorgan said:
But for the same role the contractor is likely to earn a lot more than than the permanent staff, not similar amounts as in your example. Then, even if using dividends it's quite possible for the contractor to pay more in tax than the permanent staff.
That really depends on the industry. In construction for example you don't need to give your brickies such things as laptops and health insurance. It's still possible to attract an Eastern European contractor and pay him the same square meter rate that a British PAYE brickie gets paid. plasticpig said:
That really depends on the industry. In construction for example you don't need to give your brickies such things as laptops and health insurance. It's still possible to attract an Eastern European contractor and pay him the same square meter rate that a British PAYE brickie gets paid.
OK, maybe so, but in the context of this thread I was assuming we were talking about professionals eg. IT, engineeringI work as a ppi contractor. The money's not bad and I could "afford" to run something a lot nicer than I currently have. I'm always getting asked why I don't change my crappy old golf for something nicer. Sadly , the reason is that the contract wont be long enough for me to commit to either a big loan or lease and I've never contracted before so I don't know what else is out there with regards to admin / office jobs (no IT skills unfortunately!). I certainly don't fancy being a "perm" any more in future though!
Congrats to you all who can afford and have committed to nice cars while contracting, ignore the jealous idiots!!
Congrats to you all who can afford and have committed to nice cars while contracting, ignore the jealous idiots!!
I haven't read all the posts but it is a particularly British thing. In the States if you have a nice car people say "nice car mate" and think one day they will own one. Over here it is the opposite, if I haven't got one why have you? And worse is when they then try to make you suffer.
A mate of mine is a farmer, he will not buy anything off a company whose reps have better cars than him, so he buys off the worst company for treating their staff because they are frugal, in his eyes. Never mind the owner has a large boat.
We used to celebrate success, now a large part celebrate being ordinary.
A mate of mine is a farmer, he will not buy anything off a company whose reps have better cars than him, so he buys off the worst company for treating their staff because they are frugal, in his eyes. Never mind the owner has a large boat.
We used to celebrate success, now a large part celebrate being ordinary.
Contractors, you may want to read this: http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Went to a new client last week. Wife needed the car so I had to take my car, something I'd prefer no to have had to do.
I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
wormus said:
Contractors, you may want to read this: http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Yep, Osborne has realised IR35 is impossible to police, so has lumped everyone into the same boat...Depending on who you ask, I'm a contractor or consultant. Most can't tell the difference...
Luckily for me, I have the ability to raise my day rate to accommodate the changes - plus having my partner as a director helps.
I work with clients in many different sectors. Those with a decent engineering element I've never had a problem with - there are plenty of guys who've run through the same thought process as me and bought something unloved by the market cheaply. Service industry is a different matter - full of snide comments and jealousy, when my car was comfortably under 10k. Last boss made some comments, which got bounced back when I pointed out the monthly rental he was paying on his white A5 cabrio, and that he was the one who had signed off the spend. Current place take the piss about me driving a 'plastic bathtub' before asking to go out for a spin. Car park includes AMV8/Cayman R/Marcos Grantura...
It's been a good year so far, so am looking. Can't buy what I really want (T350) as a big part of it's appeal I'd how wonderfully, obnoxiously attention seeking it is!
Pork said:
Went to a new client last week. Wife needed the car so I had to take my car, something I'd prefer no to have had to do.
I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
I started the current gig recently and thought I'd be discreet with the car - its a massive (public sector) site, loads of parking some distance from the main buildings and after parking as far away as possible I took a look back at my debadged, filthy and very ubiquitous, unassuming looking M5 and thought 'nobodys going to notice that'.I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
Permies had other ideas though... literally 5 seconds are shaking my hand in reception
"what car have you got?"
"er... 5-esries, why?"
"lady on reception here needs all the details for your pass. What the reg and model? 520? 525?"
"ffs"
theboss said:
Pork said:
Went to a new client last week. Wife needed the car so I had to take my car, something I'd prefer no to have had to do.
I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
I started the current gig recently and thought I'd be discreet with the car - its a massive (public sector) site, loads of parking some distance from the main buildings and after parking as far away as possible I took a look back at my debadged, filthy and very ubiquitous, unassuming looking M5 and thought 'nobodys going to notice that'.I was on site for three days (2-3hrs from home) and manage to get in the car park each day unnoticed. When leaving Friday, with a new permie colleague, as we approached his brand new C class estate, he muttered "so as a contractor, which Porsche is yours?".
Unfortunately, I was parked inhe space behind him so couldn't really avoid him seeing my car. What he will never get is his brand new C class will likely cost him more over 3 years than my Maserati will, purely because his is new and mine isn't.
Pointless trying to explain though.
Permies had other ideas though... literally 5 seconds are shaking my hand in reception
"what car have you got?"
"er... 5-esries, why?"
"lady on reception here needs all the details for your pass. What the reg and model? 520? 525?"
"ffs"
I feel for you there mate.I've made the mistake as a contractor - only a couple of times when I happened to be getting the car serviced close to where I was working. Both times people spotted me driving it out of the car park at the end of the day and I got the comments. Lesson learned. Am permanent at the moment but if I'm contracting in the future I'll definitely be doing the commute in something very plain.
MattHall91 said:
I feel for you there mate.What seems to have got their backs up is not the car itself but the realisation I've been commuting 1k miles a week in it.
I think some of them do just believe its a diesel.
Edited by theboss on Thursday 16th July 23:07
Many moons ago I started a contract in London and at the time I had moved from perm to contract so lost my company car and my weekend toy was a Corvette... had planned to park it on the top floor of the car park where no one parks except the pool cars for storage. All was going to plan until I arrived on day 1 and found my car was too wide to get up the ramps! Ooops.
Managed to get a Vectra after a week so not too many people noticed but word spread quick enough!
Managed to get a Vectra after a week so not too many people noticed but word spread quick enough!
mmmunch said:
I get it all the time, more so after each car change/holiday.
I politely remind them that out of my client base, I charge them the least...
Do I care, no- unfortunately some of the employees are so focussed on image. One has a Lexus RX that's 4 years old that they can't afford the final balloon payment on...
I just don't get folk who buy cars on finance.....why pay over the odds for an item that immediately loses circa 30% the moment you take delivery and park your arse in it for the first time? I politely remind them that out of my client base, I charge them the least...
Do I care, no- unfortunately some of the employees are so focussed on image. One has a Lexus RX that's 4 years old that they can't afford the final balloon payment on...
Scoredraw said:
I just don't get folk who buy cars on finance.....why pay over the odds for an item that immediately loses circa 30% the moment you take delivery and park your arse in it for the first time?
That doesn't make any sense. Does the car not depreciate in the same way even if it was bought for cash?
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