[Closed] Talk to me about Contracting

There are a lot of ins & outs. Many of which are misunderstood

These guys are good for set-up, although their charges are a little high for me as my needs are very straightforward

http://www.sjdaccountancy.com/about/resources/limited_company_formation.html?gclid=Cj0KEQjw2fLGBRDopP-vg7PLgvsBEiQAUOnIXAK7ak4KqEXOMIvGW3MH8nOWr4D0rTgMzk0TXLfFO-saAvaM8P8HAQ

I'll be switching from Ltd Co to umbrella pretty soon. Probably. Many will due to changes in IR35 determination responsibility, but I should have done it last year when I lost expenses.

Public sector or private?

In the public sector it looks like it all has to go via umbrella companies now.

Private sector, Ltd company is fine. Umbrella maybe if you want to or have to work inside IR35. Take home won't be much different to being an employee and you get no holiday/sick etc, though you can do a few things on expenses. Main benefit will be the flexibility of contracting.

Ltd company and working outside IR35 and you're more of a proper business (or should be). Full flexibility, control over the money and maximising take-home.

Better for working on a range of jobs, short term contracts, maybe some at the same time, and working with companies that treat you as a supplier. The regular agency bum on seat route looking like another employee but working as a contractor with long contracts, really places you inside IR35. Though many can get away with it or stay under the radar.

Anyway, +1ish SJD. They do know their stuff and do a good job, although yes they aren't the cheapest. One of the biggest used by contractors.

Pension is complex. Talk to a pension advisor. I've ended up continuing with a private pension provided by previous employer and re-arranged that to have my company pay all the contributions into it. Plus a few other pensions dotted about from old jobs. None of it is going to cover my retirement, not comfortably. Other investments and property might do.

http://www.contractoruk.com/first_timers/

I contracted for a few years, the money can be good as can the lack of office politics.

You will stagnate in the role you're in unless you train yourself / have a career plan.

Hm. I was pushed (with redundancy to soften the blow) and ended up working with school friends, has been good lifestyle in that I can work from home, choose my hours.

If they are in a rocky place chances are redundancy payout may not be much (could you ask if they plan to lay off). But I did consider leaving my previous employ a while before I was pushed, decided that it was a leap into the unknown and did feel that things were bit rocky and redundancy might be in the offing..

I retain being sole trader status, supply own tools and don't expect work -- accountant reckons the I'm OK as far as IR35 is concerned but best check that.

"[i]In the public sector it looks like it all has to go via umbrella companies now.[/i]"

Not true. I'm sitting in a civil service building right now, and we've been told we're outside IR35. Some types of supply contracts are able to do this.

Another guide - http://www.sjdaccountancy.com/about/ourservices/first_timers.html

Sundayjumper - Member 
Not true. I'm sitting in a civil service building right now, and we've been told we're outside IR35. Some types of supply contracts are able to do this.

It's getting harder and more complex, and even if you've been told you're outside, some clients aren't taking the risk and want you on the payroll.

https://www.caunceohara.co.uk/pscs-inside-ir35-keep-calm-carry-research/

ps rule changes from the 6th April

https://www.gov.uk/guidance/off-payroll-working-in-the-public-sector-personal-service-companies

It's private sector. I'll have a chat with my accountant about it.

I need to work out a rate that I'm happy with to cover all the extras and make sure I have a slush fund to fall back on.

"[i]...even if you've been told you're outside, some clients aren't taking the risk and want you on the payroll.[/i]"

It's our civil service client that has told us we're outside. I realise I'm probably in a minority though.

But there's no blanket "in" being applied anywhere. Clients have to be able to show they've made an assessment before deciding in/out, it's illegal to throw a blanket "in" across everyone.

Clients have to be able to show they've made an assessment before deciding in/out, it's illegal to throw a blanket "in" across everyone.

Looks like NHS aren't getting the message...

http://www.contractoruk.com/news/0012959nhs_deems_its_entire_psc_workforce_inside_ir35.html

Or the IPO

https://www.theregister.co.uk/2017/03/27/post_office_and_gov_departments_accused_of_blanket_approach_to_ir35/

All the pension/tax stuff can be taken care of if/when....

I've seen both sides of the coin ... but one particular thing to consider [b]either way[/b] is most good things come to an end.

I knew a guy who was raking it in late 90's... he was just one of the few people knew how to configure a specific telecoms switch... then everything went digital ... Contracting in certain areas seems to be cyclical...

A lot of people who are pushed by redundancy rather than choosing don't make it... some do...

I have one friend who was a single mum living in a squat and contracting for 12 years and investing she is a multi-millionaire - despite coming across as a dizzy blonde (a bit of an act) she is financially incredibly astute and her understanding of using money took me 10 years to understand how much she does!

I've lots of friends who were contracting and the allure has always been there but the last 3-4 years has been a rough time in my industry and 75% of them are presently either not in contracts or just scraping through and spending more time trying to find contracts than actually in them.

That said the smarter ones earned enough to put something aside....though a few did put stuff aside but circumstances changed (having a kid or a divorce etc.)

As I said Contracting in certain areas seems to be cyclical...so many of the survivors have jumped into full time or contracting as waves
It seems to me whole industries go through employee/contractor/employee cycles so staying flexible seems key.

Clients have to be able to show they've made an assessment before deciding in/out, it's illegal to throw a blanket "in" across everyone.
Looks like NHS aren't getting the message

I can say from personal experience that parts of the NHS are applying it properly (assessing individual 'engagements' using the online tool). The difficulty is if you get to the situation of being threatened with a financial punishment from NHSI for [i]following[/i] the HMRC rules. And you obviously risk a penalty from HMRC for not following their rules.

I only started contracting last year, not sure how long it's going to remain an attractive proposition given the government's current modus operandi

Two main aspects to contracting though:

- The money

- The flexibility/lifestyle/avoidance of politics

The latter is still an attraction to me even when the former is less. More than that, I'm even turning down high rate contracts that lack the latter or are going to be immense stress.

Main difference between an employee and a contractor? The contractor knows they might be out of work tomorrow.
Self employed means you're open to all your assets being fair game of you **** up, limited is more paperwork but no real exposure.
Otherwise beware ir35 as mentioned.