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For those commenting that it doesn't make much sense anymore from the tax perspective, forget the difference between employee and contractor rates. If I would s

• Nextgrid 4y ago
  You need to account for corporation tax, dividend tax, expenses of running a company, sick pay & holidays, etc. Once you account for all that, it's not as much. It's really advantageous if you work on a startup or side-project that requires capital; in this case your company accumulates the money and can spend it without incurring any tax (not to mention claiming back VAT), where as buying that same equipment as an employee means not only did you already pay tax on that money, but you can't even claim back VAT. If you're just looking for an equivalent to a long-term permanent job but as a contractor (even with a legitimately Outside IR35 contract with no tax-avoidance shenanigans), it's not worth it. A conservative calculation on a 500/day rate assuming 44 weeks worked in a year, 11k/year salary (with the rest as dividends), 6k/year pension contributions and 2k/year expenses suggests that it's equivalent to ~110k permanent salary. In practice, you might actually get a bit less due to downtime in between contracts.
  • haspok 4y ago
    But the original statement still stands. Which one do you think is easier: A. Finding a contract 500 per day, or B. finding a job 110k per annum? The latter is a challenge even in London (for a techie), let alone anywhere else, while 500 is achievable anywhere, in London / the City it would actually be comically low even.