starting my 1st contract

[northernladuk]

Can you please expand that a bit? Assumed it was other way round.

You can sit happily in a perm gig waiting and waiting to get your first gig. When it lands you quit your job and go. Once you've finished that gig you are sitting there as an inexperienced contractor with zero income coming in eating away all the savings you (hopefully) put aside from the first gig. If you don't get something for a few weeks or months it can get extremely stressful and draining on your funds.

Not so much an issue if you've a long history of contracting behind you but only having one gig under your belt it puts you at the back of a long line of similarly skilled people with a wealth of contracting experience.

So you are getting paid to get your first with no experience but you aren't getting a penny while you are struggling for your second.

[JustKeepSwimming]

Can you please expand that a bit? Assumed it was other way round.

Your bills are being paid by your perm job whilst you dip your toes in contracting.

Contracting is different to perm. You don't know if your contract will be renewed or you'll be let go, or you'll be given notice at any time. It's a different mindset to perm. You might get a £500/d 6 month role and let go after 4 months and the looking at £300/d roles.

The mindset is different. You need to be aggressive (take the high £ roles) and conservative (prepare for the famines of no work) at the same time.

It really is not uncommon for experienced contractors to be out of work for 3-6 months. That is contractors far more experiences than you.

[Lance]

Thanks for taking the time to reply.
I have contacted an accountant(with several contractor clients) earlier and is going to setup ltd. I have general understanding regarding IR35(inside/outside). The agency has provided determination of contract being outside by HMRC. Would that be enough or do I need any other 3rd party verification?

Did you actually read the guides?

The client is the only company who issue a true outside determination.
You can get your contract reviewed for c. £100. probably worth it for a first timer.

[eek]

Have you actually get a Status Determination via the agency from the end client - because if you haven't (heck even if you have but the client is unscrupulous) the end client has 90 days (based on payment terms elsewhere in the payment chain) to change their mind.

Have you checked the contract to see if there is no payment claw back clause were the status to be changed by the end client or (years later) by HMRC?

[krytonsheep]

It really is not uncommon for experienced contractors to be out of work for 3-6 months. That is contractors far more experiences than you.

It can also be very messy. My advice is to have at least 6 months worth of savings to pay the bills before attempting contracting. Then trying to maintain that war chest for periods of being in-between contracts.
Example scenario might be

- Start May 1st
- Work May
- Invoice #1, 30 day terms, due July 1st
- Work June
- July 1st comes around, agency fails to pay invoice for May, gives a multitude of excuses, say's it will be paid soon.
- Work July
- 3 months in, agency goes bust, no payment received
- Client says good bye to you
- August contract hunting.
- Manage to get a new contract starting Sept 1st
- Start Sept 1st in the office, client says, we're really sorry but the budget hasn't been approved yet, can you go home, and we'll tell the agency when the budget has been approved....

While that's happening you owe the VAT on the invoices you raised, even if you haven't been paid yet. Hence it can be quite messy and stressful at times. Doesn't end once you're in a contract either, you need to have the mindset of a Samurai. Be prepared to be terminated at any moment, then move on to the next gig without asking any questions.

[PCTNN]

I have already resigned and finished notice period for my permie job.

So you resigned and worked your notice before you had a contract and before you had any clue of all the important details such as day rate, payment terms?

I'm not sure whether you're more brave or more stupid.

Best of luck anyways

[andymalory]

Have you actually get a Status Determination via the agency from the end client - because if you haven't (heck even if you have but the client is unscrupulous) the end client has 90 days (based on payment terms elsewhere in the payment chain) to change their mind.

If you haven't got your SDS yet, put the request in writing to your client, i.e. the one you have a contract with.

[dsc]

Best of luck! (I'm being serious here) just don't make the mistake of assuming that £X pd rate will mean you earn 250 * £X per year, as you earn a big fat nothing if you are not in contract. This is the biggest mistake a lot of permies make when they thing contracting is so great, they look at the rate as a guaranteed salary. As others said you basically have to be looking for your next contract constantly and that can grind you down quite quickly, especially if you get very short 3 month gigs.

Also no idea what your skills are, but I'd say you need to be getting a few contract ads a month at least to be able to keep it going. If you skills are niche, then your first contract might be your last (believe me I know what I'm talking about).

Another also, look at Qdos and their contract review service (and they also offer IR35 insurance assuming you are truly outside).

EDIT: forgot to add that keep in mind you can be dropped like a hot potato at any moment and at that point you start earning nothing. There's no notice periods and if you don't perform or the client has had their budgets cut, you will be "let go". It can be brutal and some permies don't actually understand this, but it's perfectly legal and happens fairly often. Just because you've signed a 6 month contract doesn't really mean anything, there's no guarantee you will get paid for those 6 months - you only get paid for the work you do.

[londonrulz]

If you haven't got your SDS yet, put the request in writing to your client, i.e. the one you have a contract with.

I have received the SDS from the client. Thanks

[northernladuk]

I have received the SDS from the client. Thanks

Be aware that it can change right up to the point you first get paid. More than a couple of people have come on here complaining they've been moved inside AFTER they've started.