Hi all,

Are there any IT contractors knocking about?

I'm in a permanent job at the moment, but getting more and more tempted to go contracting. I've just been offered a job that will pay me £350 a day, for 3 months. Is it worth the effort and the hassle of being "self-employed"?

I'm 20, still live at home and have no commitments.

GazB

Thats really good money to say you're only 20! I'd definatley do it, if only for a while and then go back to working permanant.

From the money side of things you would be much better off, as you have no commitments. The only bad thing, I think, is how secure it will be.

My mums ex working in IT and only did contracting work, he was loaded but the job wasnt secure at all, and he spent most of his time looking for new jobs!

If you are young and have no commitments then now is a good time, do you work with any contractors at the moment. They ,may be able to give you tips on things like setting up a Ltd company, tax, deductible expenses, VAT etc.

Is your area of IT contracting sustainable, what happens after 3 months.

I know its obvious but contractors don't get sick pay, holiday pay, employer pension contributions.

Depends how good your permanent job is. The fact you have no ties is good though. Got to remember, there's lots of people in your field of work, contracts may be difficult to come by.

Good luck, whatever the decision.

Depends how good your permanent job is. The fact you have no ties is good though. Got to remember, there's lots of people in your field of work, contracts may be difficult to come by.

Good luck, whatever the decision.

In fact mate, screw this, just ask your mum. Mum's know best!

Hi,

I've contracted or freelanced for most of my working life.

That's good money - you will need to set up a limited company or go through an umbrella company of some sort. Which you do depends upon whether you intend to carry on contracting.

The main issue is keeping new work coming through. The longest I've been out of work 'against my will' was about a month in Janury 2000. You will spend a lot of time phoning agencies, chasing work up, etc. You also need to ensure that you have money to keep you going when you're not working - if you have no major outgoings, you're in a good situation.

Is the skillset you have 'sellable' after this one role?

For example, although there are a lot of .NET contracts around at the moment, there's a lot of competition and that can force rates down. I still take a lot of VB6 work because there are less contractors in the business and it's easier to get the work. :)

On the back of one contract, it's hard to judge whether you will be better off contracting. Contracting requires a lot of discipline and you are expected to deliver from the off. You will pay for your own training, pensions, health insurance, etc. It's not an easy career, but it does give incredible flexibility.

What I didn't mention is that the job offered is in Chelmsford! But I've been offered jobs all over the UK contracting for over £250 a day so I think getting the work would be Ok if I was prepared to travel..

Joe - Do you pay an accountant to sort out all your taxes etc? I know I;d have to set up my own "company" which costs about £60 on the net and I can be the director :)

It's absolutely worth it.
I contracted for 4 1/2 years and saved enough money to enable me to start up my own business. There are a few points you have to be aware of though:

1. Get a good accountant who specialises in managing IT contractors. If you end up getting stung for too much tax then it's not worth the hassle and you might as well be permie. Email me if you want me to provide a name. Read up about IR35 and make sure that you can fulfil the criteria to fall outside of the ruling.
2. Make sure that you put money aside for those times when you're looking for work - don't always assume you'll get renewed. I used to save 60% of what I invoiced for to account for tax/holidays/time spent looking for work.
3. Be prepared to travel. I had to get up at 6am every morning and drive over to Manchester when I had contracts for IBM/AstraZeneca.
4. Be aware that you can't take the p*ss as much at work as if you were a permanent employee – you have to be very disciplined. You're getting paid a lot of money, so if you want to get renewed show the company that they're getting their monies worth and don't waste their time.
5. I know you might think you're too young to think about it but it's worth setting up a stakeholder pension as well when you're contracting but your accountant can advise on that.
6. Don't let accountants/agencies try to charge you hundreds of pounds for setting up a limited company on your behalf. Companies House: www.companieshouse.gov.uk will have all the information you need to do it yourself - cost you about £50.

Good luck!

What I didn't mention is that the job offered is in Chelmsford! But I've been offered jobs all over the UK contracting for over £250 a day so I think getting the work would be Ok if I was prepared to travel..

Joe - Do you pay an accountant to sort out all your taxes etc? I know I;d have to set up my own "company" which costs about £60 on the net and I can be the director :)

Thats what my mum's ex did. Is it legal, I always thought it sounded a bit dodgy because I didnt really understand it!

Good Luck Gaz xxx

GazB - I actually go through an umbrella company who deal with all my invoicing and such, and I get paid by PAYE. I send a timesheet and they deal with all teh money, I can claim certain expenses, etc.

The DOWNSIDE of this is that it's not as tax efficient as if I was running my own company - however, since the advent of IR35 the tax efficiency of the Limited Company over the umbrella has reduced quite a lot.

The UPSIDE is that I don't pay an accountant, don't have to faff around with VAT, Corporation Tax, Company Returns, etc.

You will need soemone else to help you 'run' the company - last time I did this you needed at least one Company Dircetor AND a separate Company Secretary - often your accountant may be able to help here. There is also a GBP30 fee each year payable to Companies House.

As for travelling - I've been lucky and never had to work away from home - I've not needed to. I've always worked along the Sheffield - Leeds - Nottingham corridor. When you work away from home you can claim expenses but it can be rather depressing. :)

As for my taxes, I don't use an accountant - I just fill in my employee tax return for my Contracting (because I'm paid PAYE by my Umbrella Company) and I fill in an extra 'Self Employed' section because I also do some freelance work. I keep reasonably good records - filling out my tax return then takes an afternoon.

If I was working through a Limited Company with VAT, etc. to deal with I think I would go to an accountant. I did my own books some years ago before going through an umbrella company, and I spent a lot of time faffing around that would have been better spent working or relaxing! :)

Thats what my mum's ex did. Is it legal, I always thought it sounded a bit dodgy because I didnt really understand it!

Good Luck Gaz xxx

Yup, it's legal. You set up a company in which you're company director and also the only employee. You'll also have to appoint a company secretary. The aim is to pay tax as a company, rather than as an individual. It's 'tax avoidance' rather than 'tax evasion' - which would be illegal!

Also, if you're invoicing for more than the VAT threshold per year, then you'll also have to register for VAT and pay that once a quarter (you'll charge VAT on top of your rate). I think the current threshold is about £61,000, so you'd be over that if you're raking in £350 per day. http://www.hmrc.gov.uk/ will give you all you need to know about VAT.

Can you put anyone down as the company secretary? Would my mum be allowed? :)

Joe - Which umbrella company do you use?

Wildstar - Thanks for the info, greatly appreciated :)

Hi all,

Are there any IT contractors knocking about?

I'm in a permanent job at the moment, but getting more and more tempted to go contracting. I've just been offered a job that will pay me £350 a day, for 3 months. Is it worth the effort and the hassle of being "self-employed"?

I'm 20, still live at home and have no commitments.

GazB

do it, DO IT, seriously DO IT!!!

Can you put anyone down as the company secretary? Would my mum be allowed? :)


Your mum would be perfect! All they really have to do is sign your annual return once a year. You're supposed to have minuted meetings and stuff but it doesn't really apply when you're the only shareholder of the company - what you say goes!

Company Secretary - I couldn't advise you there as there are legal duties and responsibilities that are incumbent on the Company Secretary - it's essentially the legal face of teh company in terms of dealing with Inland Revenue, Companies House, etc. This is where an accountant comes in, as you may also have to run a PAYE scheme of some sort to pay yourself, unless you take your pay as Dividends - but again, accountant time! :)

I use JSA - they're based down in Watford. www.jsagroup.co.uk They're pretty good - they're 'conservative' in that they don't do anything really exciting in terms of tax efficiency, but they seem to be 'solid'. And they pay me on time. :)

Going back to this.. Can someone provide me with a breakdown of what I'd need to do before I become a contractor? Who/what I have to register with etc.

Many thanks in advance.

GazB

I've been freelance for 2 and a half years and wish I'd started sooner,

The travelling can be a pain but I haven't had any fallow periods without work since I started (I had to force myself to take a 6 week holiday before my latest contract cos I was getting burned out)

I think there were new rules laid out in the recent pre-budget announcement that make umbrella companies a lot less attractive (can't recall the details - sorry!).

I have a limited company and use a £50 a year secretary service so I can forget about all the companies house nonsense every year.

My accountants aren't cheap but they do have a great range of FREE downloads on their site: SJD Accountancy (http://www.sjdaccountancy.com/about/ourservices/first_timers.html) that should tell you most of the stuff you need to know.

Good luck!! :thumbsup:

So I need:

- A company that provide a secretary service (what do they do?)
- An accountant to handle all my taxes and national insurance (how much do they cost?)

And that's it?

So I need:

- A company that provide a secretary service (what do they do?)
- An accountant to handle all my taxes and national insurance (how much do they cost?)

And that's it?

Considering it's taken you 4 months to even get to the stage of finding out how you go about doing it, I'd put it down to a flash in the pan idea and stick with your full time job.

Don't be eluded by the 'promise' of hard cash, someone of 20 is easily replaced with someone far better in the world of IT.

Wish you all the best if you go for this mate, travelling can be a pain but all the time you are working you won't be spending that money thats building up ;)

I have never contracted but I was sent from Helpdesk to Helpdesk around the UK when I worked in IT Support :D

So I need:

- A company that provide a secretary service (what do they do?)
- An accountant to handle all my taxes and national insurance (how much do they cost?)

And that's it?

The secretary service don't do very much to be honest - they file an annual return with companies house (telling them that you still exist basically) and they also need to sign some documents (e.g. bank account applications)

My accountant costs about £800 a month but they do pretty much everything for me (including my personal tax return) and answer all my questions within 24 hours. They also remind me when I have to send things to the inland revenue which helps to keep me out of prison. You can probably get a lot cheaper though if you shop around.

Look up the thread I posted recently about the same thing, some good advice in it.

One of the contractors i'm working with now uses an umbrella company called giantPowerHouse, worth having a look at.

The secretary service don't do very much to be honest - they file an annual return with companies house (telling them that you still exist basically) and they also need to sign some documents (e.g. bank account applications)

My accountant costs about £800 a month but they do pretty much everything for me (including my personal tax return) and answer all my questions within 24 hours. They also remind me when I have to send things to the inland revenue which helps to keep me out of prison. You can probably get a lot cheaper though if you shop around.

£800 a month. That's a fortune.
Most of the contractors i've spoken to pay about £500 a year for an accountant.

Considering it's taken you 4 months to even get to the stage of finding out how you go about doing it, I'd put it down to a flash in the pan idea and stick with your full time job.

Don't be eluded by the 'promise' of hard cash, someone of 20 is easily replaced with someone far better in the world of IT.

I'm 21 and I've got 5 years experience of building, configuring, troubleshooting and supporting servers and PC's ranging from NT to 2003 Server, exchange servers, domino servers, active drirectory, WSUS, kix scripts, symantec ghost, veritas .net backup, insight manager, various anti-virus enterprises, BrightStor ARCserve Backup, SMS 2003 blah blah blah, I could go on all day. Basically I have more experience than most of the IT professionals I know that have been doing this over 10 years. How many 21 year olds do you know that are in a Senior IT role?

The final bit of experience I wanted under my belt is RIS, voice/data patching and then building a batch of domain controllers - All of which I now have.

So, shh :)

EDIT: Forgot to mention, I'm also security cleared to SC level with the MOD. Considering how much of an issue security is becoming, there's always immediate jobs needing people with the clearance as it takes a while to be done and costs a fortune.

£800 a month. That's a fortune.


They are REALLY good though

...and tax deductible ;)

They are REALLY good though

...and tax deductible ;)

What type of contract work do you do that allows you to afford an accountant for £800 a month?!

Reason I've brought this thread back up is because a few months ago when I first enquired, I was looking to move jobs. I loved it at my old place, but didn't want to get too comfortable and not want to leave!

Then I got a Senior Analyst role in Leeds and thought it was a really good step, as it's good money for my age (21, and over £23K + benefits). I got here and I've really hated it! The people are OK, but the contract I'm on is horrid and I hate everything I do here.

Would you stick around for the money, or move on? That's why I'm looking into contracting again as I'm at a perfect place for it really (no commitments, still live at home, yet more than experienced to go contracting).

Advice needed, I'm stressing myself over it!

What type of contract work do you do that allows you to afford an accountant for £800 a month?!

whoops! I meant £800 per year!

It was a tough day yesterday and my brain was getting fried by big sums and stuff. :loopy:

All the contractors I've ever talked too have said "just do it" (I haven't yet).
According to them taking that first step is the biggest challenge, because basically you have to resign your permie job and can't really start looking for contracts until you're about 1 week away from finishing. This is a bit scary.

Once you're out there and contracting you'll be fine (or so they all say).

Slightly different aspect of IT between yourself and me, but the contract money seems comparable, we're paying contractors here £330/day.
Which if you work out a full years work (minus 6 weeks off) is nearly 80k gross.
They also only pay tax at dividend rate, so that works out as closer to the equivalent of a 90 or 100 k permie rate.
On the flip side, you have to put some away for the time when you can't find any work for 6 months, but so long as you get a decent couple of contracts at the start then that shouldn't be difficult.

I still like the idea myself, although i'm not in a rush to leave my current place.

whoops! I meant £800 per year!

It was a tough day yesterday and my brain was getting fried by big sums and stuff. :loopy:

I thought it seemed excessive.

I've only been here a few days though! But I know for sure that if I'm willing to travel down south, I can get plenty of contract jobs with the MoD because of my security clearance.