Offer

[Debbacat6]

Hi
I would welcome any insights/advice.
I am in my mid 50s...had a struggle to get back onto decent rung of career ladder after DH left marriage for a mutual 'friend' ..we divorced...and my Dad's dementia ( he died in April.
I have spent five years working my way up to a stable but boring job in an Authority.
I had worked from home doing bits of freelance for 8 years but needed a stable income and pension etc so could buy own home.
I have two DSC, one 19 and at Uni, one 16 and living with his Dad. No dependants apart from helping my 85 year old Mum out a bit.
Today I got a job offer from another Authority at £55k a year.
But amazingly also offered a contract role at £400 day from January till May!
The latter would hugely build my savings up...sorely needed
But former has long term stability.
I have to give 2 months notice in present role.
Which might I be better taking?
Both are 4 days a week at home and 5th day..First one 10 miles away Second one 150 miles round trip by train.
Second one would require me to set up a LTD company.

Any advice welcome.

It seems like a no-brainer...? Surely the first one? Stability, local AND continuity.

First one if the second one isn’t permanent.

The first one - long term stability is going to do more for you financial position over the next decade till you retire. And there is probably a good pension which you won't get freelance and will close the apparent gap in earnings. Unless you think doing the first consultancy post will allow you to find more well paid work?? - but be really sure it will.

You can also presumably try and find ways to progress in the new authority to earn more? Well done on building a career after divorce - that's a real achievement.

I wouldn’t be so quick to dismiss the freelance role from a financial point of view at least, but it is not for everyone.
You’ll earn almost twice as much in a week compared to the permanent role so you’ll be able to put money aside (although bear in mind the tax is different). If you work through a ltd company your travel costs are deductible from your profits. You can contribute to a SIPP up to £40k a year, again you don’t pay tax on pension contributions. They may consider you for a permanent job at the end.
Cons are: you won’t get training or personal development, there is job no security. Will you be happy to travel that far every week given the day rate? You’re likely to be applying for jobs again around April, so you need to be prepared to be unemployed for a while if you don’t find something straight away. Or they may extend your contract, but only at the last minute.

What I would think about is whether the contract adds valuable experience to your CV and makes you more employable in the future.
How secure in the job in Authority, are employees ever made redundant? Employers seem to like you as you got 2 offers, did you have to apply for lots of jobs or was it easy? How often do new jobs come up in Authority? What other perks do they offer - pension, training, health insurance etc…
Ultimately it depends on what is more important for you right now, and what level of risk you’re comfortable with, everyone has different priorities.

First one, definitely!

Be careful on the contract one. It may be inside IR35, which basically means almost the same as PAYE tax levels (there are online calculators you can use to see take home for inside/outside IR35), but no paid holiday/sickness days or benefits. Also need to take into account pension contribution - highly likely the permie job has a significant % of contribution to your pension by employer - as a contractor, it is all on you..

I'd put all the figures in a spreadsheet to assess total value of each job - I suspect you'll be surprised.

I agree
While the Contract role might seem like a lot more money you need to account for tax, NI, pension, sick days, holidays etc. DH is a Contractor and I have done it in the past and while you do earn well the headline figure is nowhere near what you will actually earn.
If the role does fall under the IR35 rules you will earn even less. DH was recently offered a £600 per day role under IR35 but after we calculated what he would get it was about £350 and he wouldn’t be able to offset any expenses against tax either.

I would take the Authority role.

First one. You could be unemployed by may.

Most of the freelancers/contractors I know have gone in house recently as it's just too much of a hassle with IR35

Take the first one.

£400 a day not much more than £55k- you have to think about pension and NI. No sick pay, only paid for days you work , no holiday pay. Lots of bank holidays January- May which you want be paid for (2022 has an extra one). Do they downtime over Easter?

You will also have a pension gap- which scheme are you in and what will the implications be?

Plus to run limited company (an that already sounds dodgy as to be outside IR3% he limits company wold have already been set up and tendered)

Set up costs for limited company
Accountant- £1000 a year
Payroll- about £25 a month just for you (We use quickbooks and do ourself)
? VAT registration. Even if you dont exceed the limit lots of contract insist on it
Public liability insurance- about £25 a month
Do they require Cyber Essentials -most public sector do if using own laptop and its £400
Data protection fee £40
Companies house returns

Yep
People see the day rate and think all Contractors are just raking it in and paying no tax.
I’m not saying that it’s bad money but it’s not as cushy as everyone thinks - plus there’s the stress every renewal time!!

What does the contract say about termination as a contractor- how much notice does each side have to give?
How much notice do they have to give you if your are deemed to be underperforming?