I have been contracting for a only few months now and in the beginning it took me a fair while to work out who to talk to and where to find information.
Below is just a rant on what I discovered and hopefully it helps any noivice contractors out there.
Contractor UK Forums:
If your reading these forums then you're already on the right track.
Read, read and do some more reading of the guides available.
PCG also have a forum but you have to be a member to use it.
Agencies:
Agencies get a very bad rap on forums and sometimes they deserve everything they get. There are some good angencies out there but unfortunately I have found they are very few are far between.
Hints (I actually went through a very bad experience with one agency):
1. Never send references before the interview! Always insist on giving them directly to the client.
2. If the agent says "don't discuss your rate during the interview as I will neg the best possible rate". Rubbish!! Ask the client during the interview what rate the contract is offered for.
3. Don't tell the agent your min hourly/daily rate. EVER!!
4. If the contract is 8 pages of small print be very suspicious.
5. Be very careful of restrictive clauses in contracts - remember, you are a free agent and if you are dealing with an agency that doesn't fully recognize that...tell them to get stuffed (politely of course ;-) )
6. If an agency pressures you into signing a contact quickly (i.e "we need it signed within 2 hours otherwise the client will walk") they are taking the piss and don't sign anything until you fully understand what you are signing.
7. If they pressure you to opt out of the agency regulations with comments like "you'll come under IR-35" and "the client doesn't want you to opt in"...They have no idea what they are talking about so opt in or walk.
8. If you are worried about opting in/out get advice from The Department of Trade and Industry (DTI). They have a free help line.
9. Ask in the interview whether the agency you are using is a preferred agency. If not then it is most likely they are taking a big cut.
10. Finally trust your gut instinct...if you think that the agency is not working in your best interests...THEY AREN'T!!
Eventually my contract got sorted (i.e. I went to another agency) but if I'd known what I know now (about Agencies) I would have handled it very differently from the beginning.
IR-35:
Always get your contract checked by an independent tax consultant before signing. Bauer and Cottrell offer a great service.
If the agency says their contract is IR-35 compliant...get it checked anyway.
Composite / Limited or Umbrella:
It has been a hot topic over the past few weeks but my advice is START YOUR OWN LIMITED COMPANY!! Most people think it is hard work but with the right advice/help it is easy.
The costs compared to going through a "Managed Service" company are the same or cheaper once a good tax plan is in place.
I started with a composite company structure (as most of my mates were with one) and the main thing is that they do not recognize what your business does and churn you out like on a factory line. I found the advice very "off-the-shelf".
For example: I doubt a Managed Service company will introduce you to schemes like the VAT Flat Rate Scheme, which in the end may save you quite a lot of money.
Once I formed the company (took about 24 hours through SJD Accountancy's website) and assigned my accountants (again SJD Accountancy) one of the first phrases I heard was "Tax Plan". BRILLIANT!!!
And the main thing? You own and manage your own company which is much more fulfilling and exciting.
PCG:
Join the Professional Contractors Group (www.pcg.org.uk) and take advantage of their member benefits such as discounted PI, PL and EL insurance.
They also have a free legal advice line and member forum which could come in handy if an auditor from the tax department comes knocking.
I was a permy for many years and entering into contracting can be a daunting prospect. But there is good advice everywhere...you just have to know where to find it.
Below is just a rant on what I discovered and hopefully it helps any noivice contractors out there.
Contractor UK Forums:
If your reading these forums then you're already on the right track.
Read, read and do some more reading of the guides available.
PCG also have a forum but you have to be a member to use it.
Agencies:
Agencies get a very bad rap on forums and sometimes they deserve everything they get. There are some good angencies out there but unfortunately I have found they are very few are far between.
Hints (I actually went through a very bad experience with one agency):
1. Never send references before the interview! Always insist on giving them directly to the client.
2. If the agent says "don't discuss your rate during the interview as I will neg the best possible rate". Rubbish!! Ask the client during the interview what rate the contract is offered for.
3. Don't tell the agent your min hourly/daily rate. EVER!!
4. If the contract is 8 pages of small print be very suspicious.
5. Be very careful of restrictive clauses in contracts - remember, you are a free agent and if you are dealing with an agency that doesn't fully recognize that...tell them to get stuffed (politely of course ;-) )
6. If an agency pressures you into signing a contact quickly (i.e "we need it signed within 2 hours otherwise the client will walk") they are taking the piss and don't sign anything until you fully understand what you are signing.
7. If they pressure you to opt out of the agency regulations with comments like "you'll come under IR-35" and "the client doesn't want you to opt in"...They have no idea what they are talking about so opt in or walk.
8. If you are worried about opting in/out get advice from The Department of Trade and Industry (DTI). They have a free help line.
9. Ask in the interview whether the agency you are using is a preferred agency. If not then it is most likely they are taking a big cut.
10. Finally trust your gut instinct...if you think that the agency is not working in your best interests...THEY AREN'T!!
Eventually my contract got sorted (i.e. I went to another agency) but if I'd known what I know now (about Agencies) I would have handled it very differently from the beginning.
IR-35:
Always get your contract checked by an independent tax consultant before signing. Bauer and Cottrell offer a great service.
If the agency says their contract is IR-35 compliant...get it checked anyway.
Composite / Limited or Umbrella:
It has been a hot topic over the past few weeks but my advice is START YOUR OWN LIMITED COMPANY!! Most people think it is hard work but with the right advice/help it is easy.
The costs compared to going through a "Managed Service" company are the same or cheaper once a good tax plan is in place.
I started with a composite company structure (as most of my mates were with one) and the main thing is that they do not recognize what your business does and churn you out like on a factory line. I found the advice very "off-the-shelf".
For example: I doubt a Managed Service company will introduce you to schemes like the VAT Flat Rate Scheme, which in the end may save you quite a lot of money.
Once I formed the company (took about 24 hours through SJD Accountancy's website) and assigned my accountants (again SJD Accountancy) one of the first phrases I heard was "Tax Plan". BRILLIANT!!!
And the main thing? You own and manage your own company which is much more fulfilling and exciting.
PCG:
Join the Professional Contractors Group (www.pcg.org.uk) and take advantage of their member benefits such as discounted PI, PL and EL insurance.
They also have a free legal advice line and member forum which could come in handy if an auditor from the tax department comes knocking.
I was a permy for many years and entering into contracting can be a daunting prospect. But there is good advice everywhere...you just have to know where to find it.
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