M7 COS

I'm currently working as an IT contractor under an umbrella company, Parasol.

I just wondered how much other IT contractors are currently taking home?

I'm taking home around 80% of my gross pay at the moment, but I was told it could be better.

Anyone use any other companies? Giant etc?

CheeRS

RANJ

i just left parasol to join a perm job. good outfit they are mate

Daveyboy

cue Cola.....

Stealth Bomber

80% is more than I'd have thought, this side of IR35, I never heard of anyone getting more than 85% and that was pre IR35.

Anonymous

I was managing about 86% on earnings of 120K or so per annum pre IR35 (it gets harder the higher your income is as its more difficult to find ways to get larger sums out)
Now even on a much more modest income than i was earning (im on a rather shockingly crap grand a week in my current role, which is way way below market rate) im failing to take home any more than 75% very often

I would say 80% is really good in the current environment.


What are your earnings though, because that makes a BIG difference IME

neilm

Chip... you earnt 120k per annum and you could afford to buy yourself a real cossie


WARNING WARNING WARNING !!!

A guy I do a lot of work with had an IR35 'interview' with two gentlemen from the inland revenue.

Because he's like me, a consultant, NOT a contractor he was able to ward off their advances by proving he was on a daily rate, not hourly, used own equipment, did day jobs not monthly contracts, had several customers with ongoing support contracts, supplied equipment etc

However, in the post interview chat he asked them about Umbrella Companies...

Their response was..... 'An umbrella company is NO protection !'

And remember boys and girls.. they can go back SEVEN years....

_

Neil,

With an umbrella company like parasol you are one of their employees being paid pucker PAYE, all tax and NI (including both employees and employers) etc etc. You can however claim some P11 expenses which is offset against the tax/NI you pay (as long as they are genuine ) but you cannot claim these expenses if you know your going to be there a min of two years or the contract goes over two years. Hence IR35 never comes into it as you take no dividends etc etc.

Some idiots try offshoring their own company and man they are in trouble if ever caught as it basically money laundering and tax evasion. If you earn the money while on UK soil then you pay UK tax....

neilm

Then what is the point of being with an Umbrella Company, just run your own Payroll and pay both employers and employees contributions yourself.

Alternatively, you may as well just get a proper job, there is no benefit I can see there.

neilm

PS

I was only repeating what the Revenue chaps said.... about the umbrella company being no protection.

_

as it's cheaper to pay £55 per month for someone else to do everything as it's no hassle.....!!

Also proper jobs still don't pay as much plus you can't claim many of the P11 expenses are you work directly for your employer unless they contract you out (software house etc) but then they never let you do it. For example all my travelling expenses are tax/vat free and I claim £15 unreceipted a day subsistance which is tax free.

Also me personally I will never work as a permy ever again. Too much bullshit - just want to do my job and get paid what I am worth plus there is no real security in a perm job anyway.....!

Adam_BlackRS

I'll be using Giant from the 3rd Jan..... take home is about 80%. Everyone i've spoke to, recommended Giant

neilm

This doesnt add up.

If you have to pay employees Tax & NI and the you have to pay the employers contributions How do you get any more money out of the umbrella company if you cant take a dividend ????


If you earn £30,000 in a year, the tax & NI liability will be the same as someone who was employed, but you then have the added shitter of the Employers contributions.



If Giant are your employer then they must be liable for them,

You dont get anything for nothing in this world... the piper has to be paid.



Unless one of you guys would like to enlighten me to what I am missing here

neilm

As for the £55 a month, just speak to your accountant and ask how much he'd charge for one of his staff to administer your payroll for you and I bet you any money it will be cheaper than £660 per year (12 x £55)


It only costs me that to get my full books prepared for companies house, my company and personal tax returns done along with my P11D

Anonymous

True i guess, could have bought several in fact for what ive spent on my current cars, but never really had the inclination to do so TBH, i only bought my rs500 in the first place cause it was stolen recovered and filthy cheap cause the bloke didnt know what it was worth and it was too good a price to miss, otherwise i doubt i would have ever bought one as i view them as overpriced for the performance they offer.
If however you were being sarcastic, look up "trouble free technology limited" at companies house and you can see all my business records like anyone else could do too for that point in time.

We all have different tastes and im quite aware that most people on this forum would sooner spent 20K on a Rs500 than me spending it on my mini, or 10K on a 3 door than me on my 1.6GL.

Be a boring world if everyone just wanted a cossie though and never fancied anything different

neilm

Chip I was being sarcastic.

You were letting everyone know you'd earnt £120k in a year.... I was merley pointing out... that most people would have bought a real cossie... rather than build a replica out of a 1.6GL worth about £800.

As for taste..... there is no taste in replicas.. they are simply a copy of someone elses taste.... its like fake burberry.

As for it being boring and fancying something different.... a replica by its very nature is not different......

_

Neil,

You don't get no extra money from an umbrella company. There are only useful if you know that you are caught by IR35 and don't want the hassle of buying a company, doing payroll and then paying an accountant. However if you are NOT caught by IR35 then you would be a complete fool to use one as your own company and dividends are they way to go! Another thing that the umbrella company do is cover you for Professional Indemnity insurance and public liability insurance which also saves few quid!

After spending many hours looking into it all and I could see no advantage in using my own company after IR35 came along....

lamb chops

Interesting thread Im currently employed but was thinking of trying the contracting world next year perhaps as the rates are starting to rise again. Think limited company would be the way to go though.

neilm

Aaaaah I see....

The umbrella company is your pimp !!

You dont set up a limited company or any of those things.

They just whore your ass out... or even better you find your own work and they then make money off the back of you....

GENIUS.... Wish I'd thought of it.....

_

I find my own work, set my rate and pay them a massive £55 per month to have a no hassle payment vehicle for me to get my money from my client turned into PAYE/Expenses and then into my bank account not forgetting a couple of extras like the insurance which comes with it.

OK Lets turn this around - tell me what's is the point of having a limited company if you are caught by IR35 ? What is the advantage of it, what am going to save ? How much is your insurance ? How much paper work do you have to do each year (btw I fill in an online timesheet and expenses form one a month - take 15 miniutes tops) ?

Have YOU tried an umbrella company ? I have done both - had a limited company for 10 Years and now use an umbrella - so done both and IMO if you are caught by IR35 which 95% of IT contractors are then the umbrella is the way to go.

_

Why unless your outside of ir35 which i doubt you will be ?

Jim Galbally

why dont you all just get proper jobs and ditch IT contracting you aint fooling anyone into thinking you guys know anything about IT

JohnnyB

aye Jim


We know all

Jim Galbally

what i never quite understodd is how people actually make the transition from trainee sales assistant at mcdonalds to IT contractor?

neilm

Easy... they register with an Agency and do IT roll out work paying £7 an hour and progress from there.



As I said in an earlier post... I am a CONSULTANT NOT a contractor, there is a BIG difference.... so I am outside IR35.

neilm

This STILL makes no sense.

WHO...... watch my lips now... WHO pays the EMPLOYERS NI contributions on the money you have earnt ?

I can be sure the £55 a month doesnt cover it.

northerner

I'm with NeilM on this, especially after looking at Parasol IT's calculations which deduct the Employers NI contributions from your pay + their monthly fee.

_

I do from the money I earn/get from my client - read my earlier post. For someone who comes across as quite a clever chap on here I can't beleive such a easy concept is so difficult for you to understand............ It's a straight forward PAYE payment vehicle.

Umbrella takes money from my client and then take out all tax liability (PAYE-both employees AND employers NI and income tax) after tax free P11 expenses have been taken in consideration.

The £55 does not pay for ANY tax, its their fees for doing it all for you - Just like a monthly fee most accountants charge.

So anyway back to that question - tell me what's is the point of having a limited company if you are caught by IR35 ?

_

Just the same as if you run a limited company if you are caught by IR35. Everyone has to pay both employees and employers NI apart from self employed people which unfortunatly is a no go for IT contractors.

neilm

SO....

Just to clear this up....

You find your own work.

When you've found it, you notify the umbrella company and they invoice your client.

At the end of the month the umbrella company pays you a 'wage'

BUT

You pay YOUR TAX & NI and then the umbrella company deducts the extra to cover the EMPLOYERS Contribution as they are technically your employer.

And then on top of that you pay them an additional £55 for them to administer it all for you.

I guess it does remove you from the VAT Liability, but if you only send 1 invoice a month thats hardly a hardship.


There is very little benefit in doing this other than you are paying a 3rd party company £660 a year to run a payroll and VAT rather than an accountant.

Because they run it as 1 payroll of which you and potentially hundreds of others are employees thats how they may their doh... its just a numbers game.


Tell you what...

You can all come and work for me ! Under my company, there's plenty room, especially if you find your own work and all I have to do is send out invoices and give you your money at the end of the month, less my cut.......

_

That's a dam good idea if you know someone who is willing to do it! - at a cut down price to cover the admin/hassle etc!

M7 COS

This thread has really taken off recently...

neilm

Unlike IT Contracting....


Some of the rates being offered these days are just a joke.... especially at the lower end, you'd get the same money working at MacDonalds... and they'd give you clothes and feed you

Anonymous

LOL, so much truth in that!

I cant believe how rates are now, i would be happy to get half the sort of wages i was reguarly turning down 5 years ago

northerner

How bad are the rates? £25ph?

neilm

I've seen roll out work.... which ok, is basically unboxing new PC's placing them on users desk, removing old kit, perhaps imaging the machine

£7-9 per hour.

First line support, helpdesk stuff £9-11 per hour

Second line support, helpdesk stuff £ 15-23 per hour

With rates like this it is better to have a proper job.

Its only the top end skills that are fetching £30-50 per hour.

Problem is the market is swamped with chancers who think IT is the route to big money....

And employers still have now easy way to tell if someone is any good or not, you could be 4 weeks down the line before you suss the contractor isnt what you were expecting. By that time you've already blown a few grand to find this out.


Its not like a welder, you know with in 10 mins of him picking up the torch if he's any good or not.


The people who are making big money is this world now are tradesman, Sparks, Brickies, plumbers..

Anonymous

Ive not had to go that low yet, but have dipped under 30 quid.

Used to get 60-70 VERY easily, like literally turning down contracts left right and centre at that rate

Stealth Bomber

It depends on the skills, there's still plenty of big money contracts out there. Me in my sensible permy IT job these days, spent the last 6 months sitting next to a contractor on £700 a day, work that out per annum. Funny thing was the boss used to send him out to get the breakfast every morning... standing in the queue at the butty shop at nearly £100/hour LoL really fucking sensible!

Anonymous

Need to be in a niche market to get over 40 and hour now really, no "normal" jobs going much over that, especially not long term ones.

Ive been in my current contract for 2 years and still going strong, to me that was more important than that i could get an extra 100 a day or whatever somewhere else, plus its relaxed here and i can surf the net etc and its not a problem, so it doesnt seem like such hardwork.

Stealth Bomber

Fair enough, it's not like I watch the market much these days, settled into a permy job now, paid leave etc. is nice even if it's isn't going to make me rich.

Oh and ditto about being able to surf the net/come in late occasionally, worth a little drop in pay for lower stress levels!

Anonymous

I would quite happily stay here forever even though im only on a couple of hundred a day, just cause i enjoy it and work with some interesting people.

Plus not many IT jobs where you also get to do stuff like testdrive cars on track etc sometimes.