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Comment by ownagefool | Hacker News Reader

I guess that depends on location. Personally, in the UK, I wouldn't dream of being a perm employee. Contract is the only way you can hire me.

You can't really say a company is deemening me by holding on to me as long as possible.

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What are the advantages of contract work in the UK?

Probably less taxes.

Yes it is a nationwide scandal, in IT, media, even the civil service and the BBC. If it looks like an employee and quacks like an employee then it should be taxed like an employee.

No it is not a scandal and no I am not an employee. I have no expectation of ongoing work. I come in, I get going fast, I work efficiently and smartly and I leave when the project is done.

Very different ballgame to permanent employment. Permanent work also pays really badly as a rule.

As long as "when the project is done" is a reasonable length of time (ie. weeks or months, not years) then I'd say you're not quacking like an employee.

I don't think working efficiently and smartly is a good criterion for judging whether or not you quack like an employee.

Well given the standard of perm workers I've been around lately... it seems to be a different mindset and good contractors seem more aware they're there to get the job done.

YMMV of course. And yes, I tend to find six months is a good timespan, project dependent of course. I know there are contractors who hang around at places for years, that seems like something different.

No that was the contract for personnel services scam not IT contracting which is treated far less fairly than say accountants or lawyers.

As long as you can legally avoid some of the issues surrounding IR35 (taxation rule, not law, specifying who is a contractor and who is an employee) and know the rules about pay vs dividends you can pay significantly less tax.

A lot less even on an umbrella (akin to a w2) you make a lot more that a permanent employee. It always surprised me how poorly paid American contractors are relative to full timers.

One chap on Stack over flow seemed to think a 15% premium was a good deal id be looking for 50 - 100% - I looked at a 6 moth contract for Perl at companies house and at the day rate I would have gone in at £400) I would have been on £100k Gross and around 80K after Tax.

As others have commented, you trade the perception of job security for much higher pay and tax breaks. Companies will let you go when they no longer have work for you, but finding work isn't hard for someone resonably talented.

In IT? Buckets of money, and a ridiculously low tax rate. When I was contracting, I actually felt guilty at how little tax I was paying (about 9% effective, as opposed to about 30% typical for a wage).

Downside: binge-and-purge income (this is why I gave it up). Shitty work for shitty people - where there's muck there's brass, and where there's muck there's contractors cleaning out IT toilets that haven't been cleaned in years.

What is the rationale for the lower tax rate?

I'm mostly curious because in the US it is somewhat the opposite - employers are required to pay a tax for every employee, so if you are self-employed your tax rate actually goes up.

Because they pay your umbrella company, something something corporate magic.

I think the real reason is that the tax system is biased to the already well off.

yeah, you get the money out the umbrella company via dividends rather than salary.

In IT maybe, but those security guards are probably permanent employees of the firm that Google sub-contracted their security to. So reality they may just be moving from being a permanent employee of Acme Security Corp to that of Google.

It seems they get more benefits being a Google employee though (from TFA at least).

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