First contract - caught by IR35?

[heyya99]

Why do you want to go contracting bearing in mind you don't appear to understand the basics. Give us a clue on what you are after and we can tell you if it is achievable.

I want to save as much money as I can for about 5 years. Then possibly return to education. Maybe a PhD. I need to fund this.

Apart from the money, I like the flexibility of contracting. I like the fact I can do a different project per year or so. Keeps it fresh and interesting.

[malvolio]

"Going contracting" is a career choice, not something to pop into on the off chance you will be successful or even make any money at it. Get it wrong, or go into it without knowing anything about it and you'r chances of failure are quite high. So read the guides as suggested and find out what it is you are getting into.

That said, it depends what you do for a living (another mystery) and whether or not you have something to sell. Your potetnial clients are looking for people with a solid delivery record, nothing else. You also have zero history of successful contracts (not the same as successful employements by a long way), so are at several disadvantages.

That's not meant to put you off, but to wake you up to the point where you start to think. To be a contractor means basically cutting yourself off from any kind of support network. You have to be very good at your job, you have to give up ideas of progression for a long while and you are in front of tough competition from other contractors and kindly souls like agencies and HMRC.

If you think you're good enough then go ahead. But don't go looking for justification, decision making is now your problem.

[heyya99]

"Going contracting" is a career choice, not something to pop into on the off chance you will be successful or even make any money at it. Get it wrong, or go into it without knowing anything about it and you'r chances of failure are quite high. So read the guides as suggested and find out what it is you are getting into.

That said, it depends what you do for a living (another mystery) and whether or not you have something to sell. Your potetnial clients are looking for people with a solid delivery record, nothing else. You also have zero history of successful contracts (not the same as successful employements by a long way), so are at several disadvantages.

That's not meant to put you off, but to wake you up to the point where you start to think. To be a contractor means basically cutting yourself off from any kind of support network. You have to be very good at your job, you have to give up ideas of progression for a long while and you are in front of tough competition from other contractors and kindly souls like agencies and HMRC.

If you think you're good enough then go ahead. But don't go looking for justification, decision making is now your problem.

Thanks for the reply.

I'm not looking for justification. I'm looking for advice. Basically, I've left my permie and have decided to get ino the contract market. Here is my situation.

- JEE software developer of 4 years.
- Left company after a year on £43k.
- Offered same role as contractor in same company at £350 per day with 3 month contract (likely 6 months plus if I want).
- Wondering, with the IR35 issue, is it silly of me to take the offer from my old company, even if it the short term or should I say no and continue seeking an external contract.

[jmo21]

Why not just go brolly for this first contract to avoid worrying about IR35 at all.

Or if Ltd pay a normal 'large' salary and ignore divvies.

You won't 'earn' as much, but you won't have IR35 to worry about. Once you get the next role, adjust salary/divvy split.

[Greg@CapitalCity]

Wondering, with the IR35 issue, is it silly of me to take the offer from my old company, even if it the short term or should I say no and continue seeking an external contract.

Not at all. If you really want to get started with contracting, and see yourself doing it for awhile, then I suggest you get a ltd company set-up, and for this first gig, operate payroll as if the contract was caught by IR35 (still worthwhile getting a professional opinion from an employment law specialist though) - your accountant will be able to calculate this for you. You will still be significantly better off than the permie rate you were on. And when the next contract role comes along, IR35 may not apply, and you will be able to operate more tax efficiently from that point onwards.

[Old Greg]

Listen to the good advice here and read the beginners guides on the links to the right. There is another good one on the sjdaccountancy.com website. You have to register (for free).

But... one of the tricky things about contracting is starting. You have to hand in your notice on your employment and then face an uncertain period without an income trying to convince clients and agents that you're worth a go, when up against seasoned contractors. You have a rare opportunity to make the leap without that uncertainty. If you do it, work every day you can for your first contract and bank the money. Then you are in a better position to face the uncertainties of the second contract search - money behind you and a contract on your CV.

[northernladuk]

Do you fully understand the terms 'Bench' and 'warchest' yet?

[Old Greg]

Do you fully understand the terms 'Bench' and 'warchest' yet?

Be a love and google them and paste links for us.

[northernladuk]

Be a love and google them and paste links for us.

Here you go...

For OG

[Old Greg]

Here you go...

For OG

Can we restrict this behaviour to 'General', please.