Contracting Experiences

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Hi all been a while since I last posted. Was made redundant from my last job but got 2 months payoff and was only there a year so it was a result. I've had a bit of a holiday and am now back working as a contractor and might do this long term if I can get regular work as the money is good and the benefits are excellent.

Has anyone else went down this road and would you ever go back to a normal job.

My view is to do a contract and take a little time off and do some courses in between contracts and hopefully make a good go of this route.

 

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Hey Slypie I've done a few contract jobs on the side while working as a full time employee, and I don't mind doing that at all.

Some of my friends do consulting and they say they love it. Reason being is they can afford to take longer breaks, sometimes the jobs can be worked on from home, etc.

My teacher loves contracting jobs, in fact thats what he's done most of his career is consulting.

 

I think I might stick to doing contracting for a while. I've been told that the contract I'm doing now might be extended until Easter from December which would be pretty good. The money is good and I like the flexibility of working for different companies and building my skills up through contracting work. After I'm done here I'm going to take a month off and do a course in Visual Basic which I could never of done in full time work.

 

Well done m8! What kind of pay rates can one expect to get from contracting? And what does your current role involve?

 

It's difficult to say about the pay rates as it would depend on where you live and what area of IT your in. For my area and what I do (1st/2nd Line) the rates are from about £10-£18 per hour. If I can get regular contracts then this is the route I might take for the forseeable future.

 

*high five*

we're in the same boat, I've been contracting for a while and normally take a good month or so off between contracts. my average earnings from contracts are between £11p/h - £15p/h (the current one is £15p/h).

Im contracting in 1st/2nd line as well and it's excellent having that flexibility, earning good money and getting the time off as well. There are a few risk elements here and there (especially if you have bills to pay, etc) but all-in-all if you work hard and treat it like a full-time permanent comittment it really pays off -- most times you'll get offers for extensions and possible permanent roles.

It's worth noting: it's a skill in itself to have the ability to melt in to new companies, new roles and working amongst new colleagues seamlessly -- you'll find the long-term staff around you dreading the thought of having to ever change their job because the longer you stay in a particular environment the more scary it becomes to face a new reality or change! (for a lot of people I've come accross anyway)

For those needing experience, I highly recommend my fellow IT enthusiasts to humble thy selves and take a few contract roles -- great way to build experience, earn good money and get more than just a toe dip in the ocean of IT work

 

Thanks for the reply slypie

Excellent post ay5000

 

The price does depend on location as well as the client - but I'm working with some contractors and they're on £25 ph - but we are all SC cleared so I think that pushes the price up.

 

Checkout this site:

http://www.contractoruk.com/index.html

Just learn to ignore the back biting and sarcastic comments, or learn to give as good as you get on their forum.

 

I will never go back to being an employee of someone else unless I fall on particularly hard times.

My LTD company is more than me being a contractor - now I've gone through all the rigmarole of doing that I want to build it up to a consultancy and to infinity and beyond!

Contracting has seen me go from a dead end crappy job in an aweful place in March this year to where I am now which is a financial exchange in the heart of the city - in between the Lloyds building and the gherkin.

In that same time my rate has doubled and will continue while I rack up experience and more certs.

Contracting is scarey stuff - but fortune favours the bold.

@wizard- I agree the CUK lot are a tad sanctimonious and cynical - if you're serious and want straight up info join the PCG

 

Interesting thread.

Excuse my ignorance gentlemen but what actually is contracting and how do you start contracting?

 

wow your right the bitching in that forum is pretty funny.

 

It's off the scale as far as smugness goes.

If you want good straight up info and advice on contracting go to the PCG.

I'm a regular on contractoruk - it's good for a laugh but that's about it - check out the 'technical' forum - if I need help I ain't going there...

 

Thanks for the linky.

 

Contracting is where you work for yourself as a LTD company or through an Umbrella Company who you technically work for and they sort your Tax out. Usually contracting earns you more money but is risky as you can be let go without much notice and you don't get paid for holiday's and sick etc. As a contractor though you get lots of tax breaks such as an allownace for meals, travel to work, general expenses, Books, courses, equipment etc.

On a side note I'm working for an umbrella Company and think it's easier for me to do at the moment but what are the benefit's of creating a LTD company compared to an Umbrella Company???

 

The Umbrella take you on as a PAYE employee and handle all of your tax/NI etc. They make the money up by claiming expenses so you almost make as much as you would if you were Ltd - minus the umbrella fee.

When you go Ltd it works like this:

You are the company director and sole shareholder - so:

You factor in business expenses such as - travel, lunch, training, broadband - these are all tax deductable.

So you make 3k a month - gross

You spend 150 on travel, 15 on broadband, 150 on lunches etc, 50 on an accountant, about 30 on insurance (PI+PL) and to be careful 12 on PCG membership (I won't go into IR35 here).

You also pay yourself a minimum salary of 5k which is about 450 a month (gross)

So your company expenses come to about 800ish a month which you deduct from the gross income of the con tract.

The figure you are left with is subject to corporation tax @ 20%

What's left is available for you to take as dividend which is tax free up until 33k a year

So essentially your work travel/food/training/new PCs etc etc is 'company expense' as is your minimum salary.

The ramiander is subject to corporation tax @ 20%

What's left is available for you to take as dividend at 0% until 33k

Complicated? - Who said tax wasn't meant to be taxing?

 

That's probably the best explanation of the whole Ltd world I've seen - beats the pants off on what people of contractorsUK come up with.

 

Thanks Derkit,

It's also important to note that our good friends at HMRC don't like enterprising IT contractors having such a cushy time.

This is why you MUST have PCG insurance - as well as an IR35 'friendly' contract.

The revenue are so desperate to make up the money (can't think what for) that instead of taxing the super rich - they will target small businesses like us with things like this:

If you're in any way concerened join the PCG:

http://www.pcg.org.uk

Sleepy civil servants will never outmenouver wistful creative entrepeneurs

 

Pete I had a look on the PCG's website but what are the benefits of joining and what do they do for you?

 

For £144 (per year) you get preferential rates on PI/PL insurance, access to phone helplines for legal and tax stuff but the most important benefit which most people sign up for is the £75k worth of legal cover in the event of any nastiness from the inland revenue.

Any kind of PAYE/VAT and IR35 investigation or claim from HMRC is covered by expert lawyers.

*Off the record - PCG membership is sometimes referred to (unofficially) as 'IR35 insurance'

You can get preferential rates on things like contract reviews where someone will read a contract you have been offered and make sure it's kocher.

I've got PCG cover just so I can sleep soundly at night knowing that if HMRC decide to come after me to balance their books (forget the likes of Richard Branson and Phillip Green - IT contractors seem to be the focus of their attention when collecting 'unpaid tax' under the notion of making 'tax avoiders pay their fair share') I know I have 75k of expert legal representation ready to fight my corner.

I've also had my contract reviewed and re-drafted to be IR35 friendly. Couldn't have done that without the PCG.