to take day rate with no benefits over fixed term contribute

[HuntingforBunting]

I work for local government in a professional role. I have been a temp for the L.A. for 4 months. The L.A have been paying my tax so I'm basically an employee of the organisation. I have been offered either a fixed term contract at 33k a year, to start in a few months, or a day rate of 250 quid a day but as a self employed person. I.e. no maternity, pension etc but it's a lot of money. We are ttc at the moment. Aibu to think about taking the money?

Sorry that should have said contract in the title!! Bloody phone

How long would either contract run for.

Fixed term would be a rolling 6 month contract and the day rate would be for as long as they need me. There is a lot of work and they are struggling to recruit

As you are TTC I would take the contract.

Even with the wage disparity? It works out nearly 2k a month difference...

What's their maternity policy?

£2k per month is a lot, you'll pay less income tax as self employed. Would you be saving the difference towards your mat leave?

On a 6 month contract if they get wind of ttc, they could get rid to avoid mat pay. I'd take the day rate and save the extra for your mat leave.

Take the day rate, save what you make on top for maternity.

With a 6 month rolling contract I wouldn't expect them to extend if you are pregnant so don't count on maternity pay. In those conditions I would take the daily rate.

Well that's the thing I don't know their maternity policy as too worried about being got rid of to ask.

Why would you pay less income tax as self employed?

If you have the day rate, when you get pg, they could 'decide' not to renew it, however you are protected as an employee.

If you 'decide' to be self-employed, you would also need to do self assessments and would you have other clients? ie would you actually legally be self employed? There is a questionnaire thingy on the HMRC website to work out if you are classed as self-employed or employed - might be worth a look.

And yes I would save the difference for maternity. They seem like a nice supportive team with lots of work, they seem like the like the work I've done, they could guess I might be ttc as of a certain age with one child already... Am I being paranoid to be so worried about even finding out what the maternity policy is?

Thanks elly I will look at that

If it is 6 months rolling would you get maternity pay anyway?
£250 is a lot! How disciplined are you? Could you live off what you'd get of you took the contract and save the rest?

Take the day rate and put away all of the extra for maternity. You'll be able to claim smp as well. If you take the contract and it ends in 6 months and you get pregnant in 6 months and one day you'll have nothing. Overall with the daily rate you're guaranteed to benefit.

Inside or outside ir35?
The general rule If inside the take the fixed contract, if outside take the day rate.
If you become a contractor remember to take into account the cost of insurance (professional indemnity, public liability), the cost of an accountant, check how many fallow days you must take etc, the cost of business banking(most offer first year free).

You pay less income tax as self employed because there are many costs that you can offset against your income. As an employee on a rolling 6 month contract you are not guaranteed to have your contract extended so the company can just let you go after 6 months. Why would a company extend a contract when the person isn't going to do the contract due to maternity leave.

£2k per month sounds like they would be trying really hard to replace you quickly with a contract person. Could you get

What is their maternity policy? If it's good (I guess an LA will be?) then you just need to do the sums.

6 months paid mat leave on £33k = £16.5k. So if you work for them for 9 months on your day rate you can save for mat leave. BUT you won't have a job on your return and I would say that is tricky. Coming back from mat leave was tough - doing it starting from scratch as a freelancer would be quit a bit harder I reckon.

Gosh thanks so much for all the relies. I am reading the maternity policy now and I think the big difference is whether I would qualify for smp. But I am quite confused by the wording. Jay, what is ir35?

Thinkaboutit, I agree, it's not compelling for them to keep me on that day rate if they can get someone else to accept the contract.

Help yourself, from what I can tell, I am an employee of the organisation now as a temp and then also as a fixed term contractor so I should be eligible- if I've got this right, it depends how many weeks I will have worked for them, I.e., 26 weeks before the EWC but I'm not sure what that is!

Ir35 is the tax legislation for contractors/disguised employment.
www.contractoruk.com/ir35/what_is_ir35_rules_explained.html

Please talk to an accountant and get the contract reviewed before you make any choices.

Thank you so much very helpful

EWC is Expected Week Of Confinement!! It's an old fashioned way of saying when your baby would be due.

Thanks Hampton!! This is a mine field.