Switching from perm...order of doing things/cost to set up?

[Netters82]

Hi everyone

I have read all of the first timer guides and used the search function but still have a few questions so hoping you can help.

I'm looking to start contracting soon, and I plan to set up a limited company to do this. I would like to hand in my notice as soon as possible so I am available.

I am unsure of what order to do things and what the start up costs may be before I get my first contract.

Should I set up the Ltd company now, or wait until I have actually secured the first contract? At which point should I bring an accountant on board? Should I be speaking to them now?

Do I need to have all the relevent insurances in place before I get a contract?

Also, about start up costs. I have read mixed things, some people spending as much as £1300 to start everything up, is this the case and if so, what for?

Does anyone have any views on the c#.net/sql market at the moment?

I am getting calls but obviously I'm not available right now so can't go for it yet.

Thanks

[JamJarST]

Well I can give you my experience as I am in my first contract. I made the decision to go contracting last year and formed a Ltd Company before I left permie land. I then actually made trhe mistake of taking a new permanent job (mistake cos the job sucked) and didn't sart contracting until May this year.

Company formation cost me less than £150, I got insuarnce when I was negotiating a contract last year which cost me £144. I am now in a contract and further costs I have spent are about £40 to get accountant to submit dormant return and change my year end to April and I also joined PCG for £264. You could start with the company formation only and you could do that cheaper than me too, so it doesn't have to be expensive.

[rd409]

Should I set up the Ltd company now, or wait until I have actually secured the first contract? At which point should I bring an accountant on board? Should I be speaking to them now?

Check your permie contract first. Most often it would deny you being a director whilst on the contract. I would recommend going umbrella for first month, and use the money from the contract to set up the ltd framework.

Do I need to have all the relevent insurances in place before I get a contract?

You dont need to have any insurance in place legally, unless you are employing other people, or you are operating from a business premises. I would definitely purchase the insurance after securing the contract and after the first day of work.

Also, about start up costs. I have read mixed things, some people spending as much as £1300 to start everything up, is this the case and if so, what for?

It depends on what you want to spend the money on? New laptop? new licences for software? Most of the accountant would let you pay them monthly so you don't have to worry about the cashflow. But speak to accountant first, and I recommend getting one before you set up a ltd company on your own, as most of the one's who post here offer that service for free.

Does anyone have any views on the c#.net/sql market at the moment?

What location? There are plenty of contracts available here in London for the said skills. Also it depends on your expertise and experience so far. So cannot really comment on this one.

HTH.

[DaveB]

Get everything set up as early as possible.

You can register you co your self for £16 and a number of the online services offer £50 back if you open a business bank account through them as well. I did this and got an account with Barclays which has been easy and hassle free to get going. Accountants can do i for you and will charge around £150 all in including VAT, CT and PAYE registration.

Once the co is registered sort the bank account, this is the thing that will take the longest. (Free)

Register for Corporation Tax.(Free)

Register for VAT and Flat rate. Can be done in advance of actually trading. (Free)

Either appoint an accountant and get them to do your PAYE/NI/Payroll or register with HMRC and do it yourself. (Free or monthly accountants fee)

Ge an accountant anyway if you are not comfortable doing your own tax paperwork. (monthly fee)

Once this is done you are good to go. Just get the appropriate insurances sorted when you actually have a contract. (£300 for the lot assuming you aren't doing anything unusual)

Optional extras include PCG membership ( Plus membership includes various insurance policies as well). (£350 quid for the plus the last time I looked)

Either way you should be able to get sorted and ready for your first contract for less than £500, all of which can be claimed against tax on your first invoice.

[Netters82]

Thanks alot for the advice so far, really appreciate it!

I am in London so thats good news, I have 8 years experience.

I didn't realise you can use an Umbrella company just for a month or two, I thought they would probably tie you in for a year or something.

Thanks again.

[rd409]

Thanks alot for the advice so far, really appreciate it!

I am in London so thats good news, I have 8 years experience.

I didn't realise you can use an Umbrella company just for a month or two, I thought they would probably tie you in for a year or something.

Thanks again.

There are umbrella that dont tie in you, all you need is a month's notice. You could invest into the infrastructure as DaveB said, but I personally prefer not to spend money before earning them, so it's your choice again. If you search on Jobserve, then there are plenty of c# roles available. The rates are not really good, but they would be decent enough to get you on a role.

[Netters82]

Thanks..

What do you mean about the rates not being good?
Just in general, or have they slipped recently or something?

[rd409]

Thanks..

What do you mean about the rates not being good?
Just in general, or have they slipped recently or something?

It's a simple rule of supply and demand. Lots of people losing their jobs in recent times are now trying to get into contracting. Unless you have a field specific specialization like "Team leading experience in Banking" or something, you would find yourself fighting it out at the lower level of contracting.

Clients prefer to have experienced contractors for projects paying decent or higher rates. Experienced as in contractors having multiple contracts and/or renewals under his/her belt. So you would find it difficult to start with. But having said that, there are plenty of roles available so you wont find it difficult to get one if you are flexible and realistic with the rates.

Also be very careful while dealing with the agents. They tend to increase their margins with newbie contractors, so if you see a role advertised at £300, and then agent tells you that the client is only offering £250, you should know where that £50 is going. Having burnt my fingers few times, now I know how to deal with them, but just to give you a quick start at the negotiation skills.

HTH.