Honestly I can’t answer that mate as I have no experience of it. A decent accountant would help you with it though.
Some questions for IT Contractors please
- Thread starter Nazbit
- Start date
No worries, was just curious, I'm not currently a contractor but might well be in the near future. It does seem like a good accountant is worth his(or her) weight in gold when it comes to this sort of thing.
Just read through this thread as am also interested in making the leap to being a contract software developer.
How has people's experiences been with online accountancy agencies? I saw Clever Accounts mentioned on the 2nd page.
If anyone has any reading material they would recommend, please send it my way.
I've been on the fence about doing this for a while but really want to make sure I've got my head around it (tax implications, best way to handle salary, dividends etc., IR35) before I truly make a decision to give it a go.
How has people's experiences been with online accountancy agencies? I saw Clever Accounts mentioned on the 2nd page.
If anyone has any reading material they would recommend, please send it my way.
I've been on the fence about doing this for a while but really want to make sure I've got my head around it (tax implications, best way to handle salary, dividends etc., IR35) before I truly make a decision to give it a go.
Man of Honour
Can't recommend CleverAccounts enough. Been with them for over 4 years now and they are absolutely superb. Portal is brilliant to use and my accountant is always replying within an hour to any email I send, I've only called once or twice and he's always been great to talk to. More than happy to answer my endless questions to make sure I understand everything.
I'd get in touch with them and they'd be more than happy to give you a free consultation to explain the basics of paying salary/dividends and so on
Soldato
If you're considering dipping your toe in to contracting than an umbrella company may be a good first step. Your take home WILL be less but it removes the need for insurances or worries about IR35, just choose a reputable one with lots of history!
Holiday wise I just say when I am and am not working, had 4 days off last week for easter, will be off for 4 days in May too. As said it's all about hitting those deliverables.
For finding work if you use something like CV library to update your CV then a good tip is to update it every couple of days so agencies see it as "fresh". Also if I see a role with a contact for the recruiter I'll add them onto LinkedIn to create a personal connection and expand your network for the future.
The main issue with the leap to contracting is to forget you're not an employee. If the client tells you on Friday that there's no work for your Monday then regardless of your notice periods then there's nothing to bill and therefore no money coming in. Build a buffer in your early contracts to allow at least a couple of months between contacts, 1st to 2nd is often hard and IS affected by the time of year.
With renewals start chasing the agent or hiring manager a month before it's due to expire!
Don't forget insurances for public liabilitiy, professional indemnity and possibly employer liability.
I would recommend my accountants who are also specialist for IT contractors, Aardvark Accounting.
What line of work are you looking for?
Holiday wise I just say when I am and am not working, had 4 days off last week for easter, will be off for 4 days in May too. As said it's all about hitting those deliverables.
For finding work if you use something like CV library to update your CV then a good tip is to update it every couple of days so agencies see it as "fresh". Also if I see a role with a contact for the recruiter I'll add them onto LinkedIn to create a personal connection and expand your network for the future.
The main issue with the leap to contracting is to forget you're not an employee. If the client tells you on Friday that there's no work for your Monday then regardless of your notice periods then there's nothing to bill and therefore no money coming in. Build a buffer in your early contracts to allow at least a couple of months between contacts, 1st to 2nd is often hard and IS affected by the time of year.
With renewals start chasing the agent or hiring manager a month before it's due to expire!
Don't forget insurances for public liabilitiy, professional indemnity and possibly employer liability.
I would recommend my accountants who are also specialist for IT contractors, Aardvark Accounting.
What line of work are you looking for?
Any idea of take home from the umbrella route?
Yes I've been doing this and started getting 2-3 approaches a month for both permenant and contract roles. Obviously varies as to how attractive they actually are.
Not familiar with this, will have a look.
Can you elaborate on that? Are you referring to a contract being terminated early or are you saying you could find yourself mid contract with no work to do for a week and therefore no pay before the work mounts up again?
Oracle Developer - SQL, PL/SQL, APEX, ODI.
Thanks again for all the info
I'd be tempted to just put in the (only seems like minimal) extra effort to set up a ltd regardless, then again I'd not take a contract unless the daily rate was pretty nice. You can pay someone to take care of it for you and it seems like a no brainer IMHO.
How does the notice period work then? The notice period only works one way? That doesn't sound legal, surely if they've got to give 7 days notice then...
How does the notice period work then? The notice period only works one way? That doesn't sound legal, surely if they've got to give 7 days notice then...
Soldato
They don't have to give notice, if there is no more work, contract can be terminated.
I'm half tempted to go contracting soon but I don't know that I do want to stay in dev so have to do some thinking.
I'm half tempted to go contracting soon but I don't know that I do want to stay in dev so have to do some thinking.
Surely that depends on the contract - the other poster said "regardless of your notice periods"... which seems off? Sure if there is no notice period (which I presume could be useful re: IR35) then that isn't relevant here but if there is then???
That's not true at all, it's contract depended. Generally 95% of places will do 1/2 weeks notice. I've done contracts with 4 weeks notice period. Might be worth you reading up, asking current contractors before you decide to go contracting. It's not for everyone.
Don
If there’s no job for you to book to, your notice is worthless.
Soldato
As said above if there's no work there's nothing to bill, rendering your notice period null in effect. Sure you can continue to drive to their offices everyday but you won't be paid!
It's part and parcel of the risk/reward aspect of contracting.
Soldato
There should be plenty of online calculators to give you an idea on the take home differences. If you're 100% commited then crack on with being LTD from day 1, it doesn't take long to setup with a good accountant, business bank account and VAT reg took the longest for me.
LinkedIn is great for picking stuff up so keep all over it.
It's part of the risk of contracting, projects can get cancelled or work just dry up. That's why it's important to build up a balance to cope with unexpected ends to contracts. I'm yet to find no work mid contract but it's prudent to be aware that it's a possiblity.
As well as your skillset location is another important consideration. How far are you willing to travel? For me it's 1.5hrs each way per day. Some are happy to work away but I did enough of that in various perm roles to be over it!
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Soldato
Exactly, you have to go in knowing full well that you could be out earlier than planned. From everyone I know that contracts, it tends to be the opposite, ie, extensions happen all the time due to loads of work, but still, they go in knowing it may not last the length of contract/extension. It's one of the key reasons I've not gone into it yet as I'd want a sizable sum in the bank to ensure if the worst does happen, I'm fine to find a new contract without worrying about bills for a good few months.
Hmmm that would differ from contract to contract, yes they can tell you that there's no work and don't bother coming in but that's why you have clauses in the contract to protect both the client and the contractor/provider. In my current contract, I have a notice period of 2 weeks each way (I'd have to give 2 weeks notice, the client has to give 2 weeks notice) - there's no other way out of it. Thankfully there's no real danger of that happening where I am anyway.
This is why it's well worth getting the contract checked over by someone who knows what they're doing.
This is why it's well worth getting the contract checked over by someone who knows what they're doing.
Seems there's a few people thinking about contracting, i'm one of them too. I work primarily as a SQL DBA in a job that so far isn't great (3-4 years in) and wouldn't mind contracting, for me though travel is an issue with young kids so i would need something commutable which is a problem. Home working is ideal but finding places that permit you to be home based is slim.
Soldato
This all depends on the arrangement, and especially if an agency is involved.
For instance my latest contract has a 2 week company notice period and a 4 week supplier notice period.
So the "company", which is the agency in this case, can give me 2 weeks notice and my limited company can issue my agency notice with a 4 week period. So this B2B contract is between my Ltd Co and the agency. The agency has as a sperate contract with the client co.
Under the payment details on the terms of engagement it states that payment will onlly be made on receipt of an authorised client timesheet.
So if client co say there's no work for me next week then there won't be an authorised timesheet to pay. Sure the agency could issue me with my 2 weeks notice but there still won't be any money coming my way until I'm back doing billable work!
As far as my experience in the industry goes this is pretty typical. The agency certainly aren't going to pay you anything for services they aren't able to bill the client co for.
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Soldato
Where are you based?
Soldato
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- 19 Oct 2008
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Worth noting that the IR35 landscape is changing. IMO the best days of contracting are gone. Get caught with IR35 in the public sector and you'll pay huge tax with no ability to claim ANY expenses either and this is going to be rolled out to the private sector. If you have some contracts inside and some outside it can be worse in some ways. More paperwork, accountant to pay, insurances to pay, a weekly fee to pay the umbrella company (inside IR35). Lots of tax and lots of fees and lots of time outside of working hours doing the paperwork and managing it all, something HMRC is not considering, and many companies won't be upping their rates to cover contractor problems.
During the good days as I needed less money I could manage my income, for example, taking only £25k out of the company sometimes in a year if that's all I needed. In contracting it's possibly to burn out so this was one reason to do this was in case I needed to give it all up later so had a company pot I could continue taking a salary from. Inside IR35 you take the lot as PAYE. Work half a year only and you'll have to wait to get a tax refund the next year now, rather than being able to manage your own salary and likely tax payments.
Sad times IMO for contractor.s.
Interviews are different. It's more about "can this person do this role for x months", rather than all the HR BS that goes with permanent positions. Questions like "where do you see yourself in x years" are simply not asked. If they do, laugh at them and walk out
I'm at the end of my time now and work with clients myself if it's appealing.
I can see in future at least 50% of contracts will be inside IR35. A good local permanent salary will be more appealing than working away from home and having to cover expenses post tax.
During the good days as I needed less money I could manage my income, for example, taking only £25k out of the company sometimes in a year if that's all I needed. In contracting it's possibly to burn out so this was one reason to do this was in case I needed to give it all up later so had a company pot I could continue taking a salary from. Inside IR35 you take the lot as PAYE. Work half a year only and you'll have to wait to get a tax refund the next year now, rather than being able to manage your own salary and likely tax payments.
Sad times IMO for contractor.s.
Interviews are different. It's more about "can this person do this role for x months", rather than all the HR BS that goes with permanent positions. Questions like "where do you see yourself in x years" are simply not asked. If they do, laugh at them and walk out
I'm at the end of my time now and work with clients myself if it's appealing.
I can see in future at least 50% of contracts will be inside IR35. A good local permanent salary will be more appealing than working away from home and having to cover expenses post tax.
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Barrow, Cumbria . Crap place for commuting out off.