Jump to content
falcodub

Contracting?

Recommended Posts

My current job is ok. But the owner has bought his son in to run the site (was meant to be my promotion) and he’s a bit of a, well.....

 

With the recent changes it’s got me looking for alternative employment and I have been contemplating contracting. 

The lure is double my salary. But of course no holiday pay etc and no job security. 

 

Anyone have experiences of what to be aware of? Good, bad, etc. 

 

Industry is engineering, more specifically manufacturing. 

 

It’s a 3 year contract btw. 

Not that it means I have 3 years guaranteed work of course

 

Cheers

 

Edited by falcodub

Share this post


Link to post
Share on other sites

Having dealt with contractors for over 12 years... Yes, it's great (good money, good hours, good 'freedom') etc... 

 

But... 

 

You can be binned at any time & then it can be months before you're sorted with another role... 

 

Just bear that in mind! 

 

I've deal with normal Web Devs earning £250-£400 a day to IT Security Accreditation and uber-experienced Systems & Software Devs for clients like the Home Office to Lockheed Martin, earning up to £900 a day. But when they're binned, that's it and it's very hard to come back from.. 

 

Get some security where you can and a good accountant! 

 

If you're not already Limited, then a good. Umbrella company like Danbro will work really well for you ;)

Share this post


Link to post
Share on other sites

@falcodub

 

Double Salary is not enough after tax you could be considerably worse off.

 

Are you an absolute expert in your field? With many many years of relevant experience and a CV full of good blue chip companies?

Do you have a glowing Lineked In profile that sells you like you are the best thing since sliced bread?

In Contracting that is exactly what a client is looking for.

 

If not then think hard 

The contracting market is flooded with Wannabees with sod all experience and often their primary interest seems to be solely in the misguided belief they will earn a lot more money. Many end up a lot worse off!

 

This is also making the job of agents that front these people on behalf of their clients difficult especially if they get 500 applicants but can only put 2-5 people forward!

These Wannabees are having a knock on effect to the hourly or daily rates as well.

 

in IT for a few years now the Bobs from India have been taking on work that undercuts a lot of UK based Contractors now we are seeing the same from Eastern Europe.

The market is very crowded and very competitive

HMG changes in the public sector > all deemed inside IR35 have pushed the cream into private sector so even more fierce competition.

 

In reality you need to be aiming for >3x your target permie salary and ensure you have a war chest to live on during the months you might be on the bench and/or running a plan B. 

Contracting can be a bit of a minefield, do you go Umbrella or Ltd. is the contract inside outside IR35, if Ltd. need to submit accounts and a SA every year, etc.

 

The role you describe i.e 3 years, immediately potentially puts your ability to claim any T&S (if you go Ltd.) at risk so you need to reflect that in any agreed rate.

 

Contracting does have it advantages though

Once you get good at it and build up a network of contacts you can then often bypass the agents and negotiate a higher rate direct because the client is not paying them  >15-20% on top of your invoice every month.

 

You can:

Put the allowable max of £40,000 into a SIPP pension every year because it is very tax efficient to do so.

Pick and choose when to work and where, work from home is often an option.

Pick and choose the type of work and the type of client.

Use a SPV for buying land to develop and buy to lets etc as part of plan B

Pay yourself enough to be comfortable the idea here is not to throw money at the taxman annually if you can do better things with it by keeping it in the company.

Use cloud based tools like Freeagent (Included as part of many Accountancy contracts) for accounts and they really are a doddle to manage each month.

 

 

Share this post


Link to post
Share on other sites

PS

I replied on behalf of 'So'

I don't know who 'So' is but I have never seen him or her reply on here ever.

 

Think very hard about starting any sentence especially on you CV with 'So'

It's a pointless word similar to using the non word 'got'.

Share this post


Link to post
Share on other sites

PPS

Contracting in the early years without demonstrable consistent income via audited accounts, can have a knock effect to things like mortgage applications credit scoring etc.

If you are thinking of buying a house or taking out some other form of crippling loan do that first whilst you are still a permie.

 

 

 

Share this post


Link to post
Share on other sites

Thank you Alexak. 

You have highlighted some issues I wasn’t aware of regarding salary and expectations of that. 

Having been a ltd company many years ago I paid very little tax and it was good at the time. 

However that was on the tools and having progressed into project management I know the jobs aren’t as easy to come by. 

Certianly given me more to base my decision on. 

Thanks

Share this post


Link to post
Share on other sites

Contracting and paying tax don't go together in my books. Contractors are all about claiming everything as expenses and paying themselves the minimum wage.  

Edited by Mr_530i

Share this post


Link to post
Share on other sites
1 hour ago, Alexak said:

PS

I replied on behalf of 'So'

I don't know who 'So' is but I have never seen him or her reply on here ever.

 

Think very hard about starting any sentence especially on you CV with 'So'

It's a pointless word similar to using the non word 'got'.

 

One of my pet hates. There was a young woman on the TV  last week being interviewed. She began every single reply with "so" then a slight pause,  and then answered the question,  drove me round the bend, same as people who say "can I get" instead of could I have. 

Sorry for going off topic. 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now


×