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Can I convince my employer to become a contractor from FTE?
Skag
Posts: 480 Forumite
I am a full-time employee, and I am thinking of asking my employer to become a contractor on a daily rate.
This is solely because contracting brings home more money (I know about unpaid holiday etc).
Is this common practice or something that people do?
This is solely because contracting brings home more money (I know about unpaid holiday etc).
Is this common practice or something that people do?
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Comments
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You can't pick and choose whether you are employed or self employed. It's about the terms of the engagement.
Eg someone self employed may be able to send a substitute to do the work, would provide their own tools/equipment, have a financial risk, have control over how/when the work is done etc.0 -
I am a full-time employee, and I am thinking of asking my employer to become a contractor on a daily rate.
This is solely because contracting brings home more money (I know about unpaid holiday etc).
Is this common practice or something that people do?
You would become the boss and I'm sure your employer doesn't want to be your client.
You would need to set up a limited company. It's very rare for a company to take on a sole trader for what is essentially labour as the HMRC could and most probably will see that as an employer/employee relationship.
As a company you would have to take out professional indemnity insurance, employers liability and public liability insurance.
You could also be terminated without any notice at all.
If the company you set up is a personal services company you might find yourself caught by IR35 and pay exactly the same tax an as employee but with the added admin costs of the company and the insurance. You would effectively lose out despite looking like you're paid more.
My advice...if you want to get into contracting is find another client (for HMRC purposes you really should have more than one client although you can have just one client it's just much easier to prove it's a real company when you've got several clients) and quit your employed job.:footie:
Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
You would become the boss and I'm sure your employer doesn't want to be your client.
What do you mean?As a company you would have to take out professional indemnity insurance, employers liability and public liability insurance.
You could also be terminated without any notice at all.
If the company you set up is a personal services company you might find yourself caught by IR35 and pay exactly the same tax an as employee but with the added admin costs of the company and the insurance. You would effectively lose out despite looking like you're paid more.
I am aware of all these, thanks.
I believe I didn't put it quite right. So, if I were to put forward my resignation, and the company still needs me, should I ask them to cancel my existing contract and go on a contract basis? Now, is this something people do? I'm not talking about converting my existing contract.0 -
The fact that they have invested hard on me and they need me. It would make more sense to keep me for say, one more year to continue existing work, rather than hire someone to start from zero.
So you're going to blackmail them into rehiring you for more money? Nice way to have a working relationship.0 -
What do you mean?
When you employ the services of a tradesperson for example a plumber do you tell the plumber how to do the job? Do you tell the plumber to start at a particular time? Do you provide the tools to the plumber so they can undertake the work? Do you train the plumber so they can work on your boiler? No you just say the boiler's broke can you fix it and let them get on with it.
As a contractor you become your own boss. You tell the client what needs doing, when you can fit the work in, how you're going to do it and you provide the tools to do the work.
If your client tells you to be on site at 8am every morning whether there is work or not then tells you what to do and when and provides the tools then it's unlikely you will be considered self employed. If you're working through your own limited company then it's likely you will be caught by IR35 and you will have to pay tax as if you are employed and it won't save anything.:footie: Regular savers earn 6% interest (HSBC, First Direct, M&S) Loans cost 2.9% per year (Nationwide) = FREE money. 0 -
When you employ the services of a tradesperson for example a plumber do you tell the plumber how to do the job? Do you tell the plumber to start at a particular time? Do you provide the tools to the plumber so they can undertake the work? Do you train the plumber so they can work on your boiler? No you just say the boiler's broke can you fix it and let them get on with it.
As a contractor you become your own boss. You tell the client what needs doing, when you can fit the work in, how you're going to do it and you provide the tools to do the work.
If your client tells you to be on site at 8am every morning whether there is work or not then tells you what to do and when and provides the tools then it's unlikely you will be considered self employed. If you're working through your own limited company then it's likely you will be caught by IR35 and you will have to pay tax as if you are employed and it won't save anything.
That makes sense. Thanks0 -
I am a full-time employee, and I am thinking of asking my employer to become a contractor on a daily rate.
This is solely because contracting brings home more money (I know about unpaid holiday etc).
Is this common practice or something that people do?
Why not just ask them for a pay increase?0
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