to be pissed that a co worker has suddenly got three times my wage and has started avoiding tax

[underpaidworker]

At work another person with the almost identical job as me has just gone to being contractor.

I thought it was just for a few weeks to tidy stuff up but turns our they've signed for a full year!

They now have less responsibilities than me but get paid three times as much. He also is nowpaying less tax and hardly any Ni due to running it through a private limited company. I'm unable to do the same as he is now taking so much of the budget.

Aibu to be seriously pissed off? Less work and more money.

No one else had said anything but I think everyone else is annoyed.

If he's established his home as his office he can claim every mile undertaken in order to undertake his work.

Absolutely Dawn

She won't though. People like the OP prefer to spend their time eaten up with resentment and whinging because they think other people have it better.

YANBU to be peeved but if your industry has a downturn and your field is at all specialist its the contractors that disappear first.

I was an Engineering Manager going back a decade and had Engineers on hour rates of £30-£40, so not so dissimilar. Some had been employed a fair while but were shocked when things got tighter and we started treating them as contractors - just paying for work needed. Some went very long periods without work and suffered real hardship as they didn't have a buffer or any security. Its good when times are good but brassic when they're not. I couldn't do it.

DH was contracting. Long contract came to an end. Took a year to find something else.

They aren't much better off, also secures the employment of contacted workers Contractors are first to go.

OTOH, 425/day for a year is a Damn good rate. Your employers could have negotiated a lot harder. Admittedly, unless they're complete idiots then they can give him a week or less of notice

www.contractorcalculator.co.uk/ContractingToPermanentSummary.aspx?uid=0&logon=False&psalary=50000&div=1&status=OutsideIR35&pyt=LimitedCompany&expenses=3000&other=0&pension=0&tc=1060L&age=30&salary=8000&rate=425&rt=Daily&rt2=Hourly&weeks=44&dwpw=5&dwpw2=5&hours=37.5&dni=4000&tty=2015&rate2=53&weeks2=44&hours2=37.5&status2=OutsideIR35&psalary2=50000&mir=0.05&ma=200000&mp=25&cid=0&vat=1&vi=False&ar=1&gs1=0&gs2=0&gs3=0&gs4=0&nd=1&pbt=76450&dpo=15-Apr-2015&dop=01-Jan-0001&inv=1&hpd=11&me=150&vt=Car&mpw=0&mpc=0&pt=Monthly&ace=500&mt=Parasol&wl=InsideLondon&uds=Basic&Host=LOCAL

I'm pretty sure that if staff want to switch to contractors and go the limited company route, they have a break in service - I think at least a month to avoid falling foul of IR35?

Anyway, while he may have signed a year's contract, there may well be a guet out clause, where the company can get rid of him sooner if there's a downturn.

Also, the pp who said that they wouldn't employ him as a contractor if it cost them more may not be totally right - the sector I work in tends to have lots of peaks and troughs. Most companies have a core of staff, and take on contractors as needed when it gets busy, then sheds them when it gets quiet. The contractors are well paid in comparison to the staff, but they have no job security at all. It's probably a lot easier for the companies than having to go through all the hassle of redundancy processes.

Many contractors with a limited company employ their spouse as a "bookkeeper" or "office assistant". It's a great way to use up 2 personal allowances and 2 lower tax brackets.

The rule of thumb I'm familiar with from the company's point of view, is that if you take a permie salary and double it, that's effectively the cost to the business, including all those things like sick leave, redundancy, pensions, training etc. (I have no idea how true this is btw, or whether it's just a useful shorthand taught to slightly dim managers. But have heard it from a few people.) So if a contractor costs less than that, it's actually a saving even if it seems like they're getting more than a permie.

Despite warnings above about being out of work etc, it is quite lucrative (sensible contractors save to carry them over 6 months).

I don't think enough women go contracting, though have known a few (a couple preferred the flexibility of being able to take a couple of months off over the summer to spend time with their kids).

He runs the risk of being picked up under IR35 - as does your employer. If the skill set you both have is one that is in demand and you fancy taking on the additional risk that comes with being self-employed, then you can do the same thing at another company. If there isn't much contracting work out there for his skill-set, than he is not really making a sensible long term decision.
I would mention the bragging to management though - unprofessional behaviour and they won't be impressed.

You can't establish your home as your base if all of your contracted work takes place at one single place elsewhere.

This thread is about women and men and the fact womn moan and don't act (on the whole) and men take more risks and it pays off. I take risks. I own. I work myself. I had just about no maternity rights, no sick pay for 20 years, no holiday pay, no pension and I earn a lot.

So go out there and set yourself up as a contractor and tout around the UK for business if you think you are good enough to generate that business. Loads of women manage it and earn a packet but don't resent people who have enough risk appetite to do what you could well have been doing had you thought about it first.

Petra can you really not think of a way around that?!