IT Contract rates vs. perm salary

[ammw]

I'm a senior Java dev with many years experience, and been working in the finance sector for last 10+ years in Glasgow. I've been considering contracting for a while now (partly for the money, and partly because I'm happy being a developer and not interested in all the politics and career bks that comes with being permie).

I'm just wondering what sort of rate I should expect, and how that would compare with a my perm salary (just below £50k). I've spoken to agencies and sounds like £375/day is about right. How will this compare once I take into account tax/NI/pension/holidays etc? Should I try to push for more?

[ammw]

Thanks guys.

louiebaby said:

If you do switch to Contracting, you need to look at the way you pay tax. There isn't a lot of choice when a permanent employee, but when contracting, it can make a huge difference.

Tax avoidance can be very good for your pocket at the end of the month. Tax EVASION is the illegal one. A good accountant, with knowledge in the area, can be very useful.

This is the area I'm unsure of ... how do you do this? I've had emails from Tarpon quoting figures of 85% (of gross) take home pay. Is this realistic? Is an umbrella company a good option?