How I got into IT contracting

Discussion in 'IT Contracting' started by drum_dude, Dec 29, 2018.

  1. drum_dude

    drum_dude Gigabyte Poster

    The title should probably be "how I fell into IT contracting"...

    Anyway, I hope the following will start a discussion or answer some questions which some of you may have when it comes to "how do I get into IT contracting?". Many, including myself, would have thought that getting into contracting required planning and research. Certainly, back in my permie days I used to lurk over at Contractor UK boards and think that I would need to plan out the following:

    - Ltd Company
    - Accountant
    - Business bank account
    - Insurance

    and on and on and on...just looking into contracting can be enough for some folk to think "I can't be bothered, it's just too much hassle" and yes, that included me too. So how did I become an IT contractor?

    Well, in back in mid 2013 I had the opportunity to move to London and be based approx. a 25 minute train ride from London Bridge station, which connects to the major tube lines such as the Northern Line and the Jubilee. However, I was still in permie mindset and so took the first permie job offer which came my way. Fortunately, that job did not work out and I left after 2 weeks. Approx 3 weeks later I scored another permie job, more money and over looking the Gherkin building. I thought "this is it, I've done it" but two weeks later and I walked out the Both roles were just nowt but massive politics and something which I hadn't quite seen being in IT in the Midlands?

    A week after I left permie job number 2, I was sat here in this very room and drowning my sorrows. My CV was up on the job boards such as Jobsite and I suddenly got a call about an "Exchange Admin contract" from an agent. Now bear in mind that I was advertising myself for permie roles. He said to me "I know you're looking for perm jobs but would you consider a contract?", I said "err...yeah" and he said "well what's your rate?". Me being totally unprepared I mumbled "err £300 a day" and he said "great, we can do that". I found out later on that I could have got £400...but I just was not savvy but he was very happy to put me forward for the role. Maybe that was because he was making an extra £100 a day out of me, oh well.

    So there's your first lesson, prepared to get a bit ripped off on your first gig.

    Within 10 minutes, he was back on the blower and told me that "the client" loved my CV and wanted to do a telephone interview the next day. Now this is something that those who are looking at contracting have to bear in mind, it's that "things" move fast...very fast when it comes to contractor recruitment. As permies we're used to an "HR process" when it comes to interviews but in the land of contracting, HR is out of the window and you will be grilled on previous experience and given an abundance of tech questions during telephone and face-to-face interviews. Call it "the market" because that is exactly what you're dealing with, not HR, the market.

    The telephone interview happened the next day and it was nothing but near 30 minutes of technical questions on Exchange 2010. The interview was handled by a project manager (contractor) and an Exchange guy (contractor)...yeah, no permies.

    All went well and I was asked to attend a face to face the next day. The face to face consisted of the same two contractors plus the dept's IT director. More tech questions and then I was told "we'll let you know next week" by the IT director, to which the project manager forcibly came in with "no, we'll let him know today because we need someone to start on Monday"...that was the Friday before the Monday.

    Within 20 minutes of leaving the premises (the place is a well know media outfit in C London) the agent called me to advise "they'd like you to start on Monday, well done". Yeah...things happened very fast. No reference checks, no background checks just "start on Monday". You'll find that some gigs are like that whereas others, mainly in finance, will do background checks.

    The agent then asked me to email over my Ltd Co, VAT etc. details, but I didn't have any. OK, this is where the lack of contracting experience and naivety set in. The agent then started to put on the pressure that I couldn't start on Monday unless I had such stuff in place. It's an impossibility to get a Ltd Co, VAT (back when flat rate was worth it), accountant and business bank account in place over a weekend. So I asked him "what are my options?" and he said "go with an umbrella".

    For a first gig, this can be a good option because you may not like contracting and so decide to go back to permie-land after the first gig. Using an umbrella means you don't have HMRC to deal with like you would as a Ltd Co contractor, you don't have a Ltd Co to shut down etc if you decide contracting isn't for you. Yes, you lose out financially and I suspect my lack of prep was music to the ears of the agent who got a kick back for pushing me onto an Umbrella that he recommended. However, the Umbrella I used was very good and is still one of the biggest brolly firms out there.

    Within a few hours, all the paper work was signed/agreed and I was ready to start on the Monday. I didn't do an "IR35" review and I "opted out", really didn't make a difference to me. The brolly paid weekly and I needed my London dream was about to go down the pan.

    For the first time in my life I was earning something like 850 quid per week which was quite something for me who was last on £24k PA up in the Midlands. Yes, you lose out with an Umbrella company because you're on the hook for Employer and Employee NI not to mention PAYE. But you can offset stuff with day to food and travel expenses, not to mention the holiday pay thing they do - never quite figured that one out.

    After a few months on the gig, I decided I liked contracting and so decided to set up the following:

    - Ltd Company
    - Business Bank Account (Cater Allen because they're free but are slow on transfers)
    - Accountant
    - Insurance
    - Registered for VAT (when flat rate paid, don't bother with VAT if you're a new contractor today)

    I decided to ride out the first gig using the Umbrella company. In total, the first gig lasted 6 months. Apparently, the 2nd gig is the hardest to they say. But I got the 2nd gig within a month of finishing the first gig but I was still wet behind the ears when it came to negotiating the "rate". However, this time around I was ready to go in as a Ltd Co contractor.

    I'm not going to mention "accountant" firms but I would advise that people look to use an accountancy who use FreeAgent. Back in the day, my first accountant was spreadsheet based, the 2nd was using their cr*p system and the 3rd is FreeAgent which is brilliant!

    So there you go. No preparation, no planning...nothing...I just fell into contracting but I felt that using a brolly (umbrella) was a good option because it allowed me to set up the Ltd Co stuff in more of a relaxed state. You could say that under the brolly I was a semi-contractor and semi-permie but by the time the 2nd gig came up, I was ready to go "full contractor".

    I really hope this helps and I hope this thread kicks off some questions from you all which I'll be glad to answer.


    Last edited: Dec 29, 2018
    Certifications: MCP, MCSA 2000 , N+, A+ ,ITIL V2, MCTS, MCITP Lync 2010 & MCSA 2008, Sonus SATP SBC 1k/2k
    WIP: Hopefully Skype for Business and some Exchange stuff...
  2. nisseki

    nisseki Byte Poster

    FreeAgent is awesome! Easy to see how much you can take out after tax and tax timeline to see when the VAT returns is due etc.

    How I got into contracting is I applied for a contract on a job board website in my local area. I didn't really paid attention that it was a contract because I needed a local job for a easier commute.

    I choose limited over umbrella and it was brilliant. More money etc.

    But then the IR35 changes came in and completely f*** it up for everyone who was limited.

    I had to change to umbrella because going limited wasn't worth it anymore.

    I'm so happy that I work in the private sector now, I'm limited again and enjoying my pay rise haha.
  3. Pseudonym

    Pseudonym Kilobyte Poster

    This is incredibly detailed and interesting. I've been considering going into contracting for a little while, probably isn't right for me just at the moment, but this is great info for the future. Cheers mate.
    drum_dude likes this.

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