New to Contracting

**malvolio** · 15 January 2019, 18:03

Clarity? OK...

Work under an umbrella and you are an employee paying full PAYE and NICs, so you net about 60% or so of your gross. So that doesn't meet your criteria.

Work through a Ltd Co and you will get to keep around 70-75% of your gross. Any more than that and you are doing something wrong and potentially illegal.

So lesson 1 - there is no magic money tree.

Does IR35 apply? No idea until you get a job and a contract. It's not a binary decision.

Lots of guides on the right of this page, and go to Homepage | IPSE and download their "Guide to Freelancing", so get reading. You have no idea how much you don't know

And finally, going contracting to earn shedloads of money is a very bad starting point.

**northernladuk** · 15 January 2019, 18:16

Originally posted by malvolio View Post

And finally, going contracting to earn shedloads of money is a very bad starting point.

And on top of that expecting to draw it all out from the start is even worse. What happens if the gig gets cut short or ends after 3 months. You are going to be sat on the bench with no income for potentially months. You should be living on the breadline for the first period to get some money in the company for when it all goes south.

Your second gig can be the hardest to get as you've no income. No security of looking and waiting while being paid as a permie.

**nads123** · 15 January 2019, 19:48

Hi both, thanks for your input on this.

The intention is for long term to set up a Ltd company and get some money into the business, to save for rainy days etc. I'm well aware of risks of losing the gig, but in my line of work there is an abundance of contracts which can be filled with my skill set so that element isn't too concerning.

Like I said, due to personal circumstances, I've a few more costs over the next few months than I anticipated so as a result I'll have to draw out more than I wanted to.

Just trying to understand for the short term what my best option is given my circumstances needing the extra cash flow.

**northernladuk** · 15 January 2019, 22:23

Cash in a brown envelope stuffed through your letter box.

**nads123** · 15 January 2019, 23:19

Originally posted by northernladuk View Post

Cash in a brown envelope stuffed through your letter box.

Oh boy I would love that!

**Yorkie62** · 16 January 2019, 07:52

Originally posted by northernladuk View Post

Cash in a brown envelope stuffed through your letter box.

Personally I use a PO Box rather than my home letter box. It's more discrete.

Sent from my SM-G955F using Contractor UK Forum mobile app

**quackhandle** · 16 January 2019, 09:56

Originally posted by nads123 View Post

Hello all,

I'm aware that IR35 is a thing

Yes, it certainly is.

qh

**WLB2018** · 16 January 2019, 12:22

Originally posted by nads123 View Post

Long time lurker, first time poster here to a lovely bunch.

Surely you have lurked enough to know more about IR35! It is kind of a big thing!

I would also suggest reading (or re-reading) the information down the right hand side of this site!)

You need to build up funds in the event of your gig being cut short, you want to spend the first year building 3-6 months buffer, dont worry about pension stuff until that is all sorted, you can move amounts into a SIPP later.

If your plan is long term contracting them get a LTD and an accountant sorted ASAP.

Back to the first point, IR35 is not straight forward or simple, get all contracts reviewed and make sure you understand what could cause you to be inside or outside, irrespective of the April 2020 deadline.

As NorthernLad stated, getting the first gig is easy as you have income, the 2nd one is harder, more so if you dont have that buffer!

WLB

New to Contracting