Reply to: Interested in Contract Work

[northernladuk]

I think also understanding what you're earning vs company money - I've seen many here thinking that they are getting 100% percent of the rate advertised.
You absolutely need to understand that from the money you're getting pots need to be set aside for:
-taxes (VAT, CT, etc)
-NI contribs and salaries for your employees (you included)
-war chests for time between contracts (6mnths+ is recommended)
-pension contributions
-expenses (travel, accommodation, equipment)

From whatever little is left, you may then with to draw dividends - this will be then also taxable as a portion of your personal income.
HTH

Absolutely this...

Also learn this thread by heart. Lots of other useful tips and ideas to know here...

http://forums.contractoruk.com/accou...-business.html

[yasockie]

Forget startup costs - buttons
Forget on-going costs and admin - small and easily outsourced.

When going contracting there is only one thing to give any concern - securing a contract role.
Absolutely everything else is very straightforward.

I think also understanding what you're earning vs company money - I've seen many here thinking that they are getting 100% percent of the rate advertised.
You absolutely need to understand that from the money you're getting pots need to be set aside for:
-taxes (VAT, CT, etc)
-NI contribs and salaries for your employees (you included)
-war chests for time between contracts (6mnths+ is recommended)
-pension contributions
-expenses (travel, accommodation, equipment)

From whatever little is left, you may then with to draw dividends - this will be then also taxable as a portion of your personal income.
HTH

[lukemg]

Forget startup costs - buttons
Forget on-going costs and admin - small and easily outsourced.

When going contracting there is only one thing to give any concern - securing a contract role.
Absolutely everything else is very straightforward.

[NickyBoy]

If it helps:

When I made the jump into contracting I gave my employer the standard notice. I knew they had a lot of work on, so I offered to stay on after that time with a 1 week notice period until I found a contract.

They accepted.

Ask your current employer the same thing after you give notice. You may be able to make a move into contracting without any down time at all

[chrisaxe21]

Thanks

All the more reason to check the contract before signing and also to have funds set aside until that pay day!

Chris

[flipFlop]

...

Do some contracts only pay when the contract has ended ...?
...

Yes.

[chrisaxe21]

Great advice folks!

I shall do exactly that :-)

Thanks

Chris

[TestMangler]

I think it's worth asking that in each other interview though. How much indemnity and liability cover they need.

A very useful point raised

Thanks

Chris

Wrong place to ask.

In all likelihood, the client rep who interviews you will have no idea.

Following the standard agency model, your contract is with the agent, not the client, so that I where you should be asking that question. Also, the level of insurance is not generally going to be a deal breaker, so discuss it with the agent after a successful interview with a client.

[northernladuk]

I think it's worth asking that in each other interview though. How much indemnity and liability cover they need.

A very useful point raised

Thanks

Chris

I don't really think that is an interview question IMHO. I wouldn't be surprised if they don't know. Just wait until your contract comes and see what is documented.

[chrisaxe21]

I think it's worth asking that in each other interview though. How much indemnity and liability cover they need.

A very useful point raised

Thanks

Chris

[northernladuk]

A lot of helpful replies already so I'll keep it short

With regards to insurance, the price for professional indemnity is likely to vary quite substantially depending what exactly you're doing, who exactly you're doing it for and other material facts such as the value of the contract you're involved with.

However, a lot of clients will tell you directly how much professional indemnity they want you to be covered by and potentially how much public liability.

Good luck with the new venture!

Am not so sure that is true for us. It's normally a pretty standard cap and price doesn't vary much between providers.

[rashm2k]

Startup costs aren't the big problem, accounting fees are only £100 per month and they will do everything for you.

In my case I left work start of June and didn't get a contract till Sept (I took July 'off' - plus I was doing some other stuff).

Once I started in Sept I didn't get paid until Dec 2014 (I'm direct), a combination of errors both on my part and the clients, but it means you need enough money to survive at least 6+ months. If not more.

Money is one thing, but you have to keep on top of it and it isn't like being a permie where you can just keep procrastinating.

[Simply Business]

Hi all,

I currently work in IT and have been in permanent employment for over 10 years now over 2 companies.

I've looked into contract work simply as the pay is much better.

I've read lots on this website, which I've found extremely helpful, so thanks for that. Other sites too have helped.

My question though is what sort of costs are expected when you decide to change from perm to contract work. I will be setting up as a Limited company, but what costs are expected initially to set all this up, or is it a case of paying your accountant say £100pcm when you get your first pay?

Do some contracts only pay when the contract has ended or is it a monthly payment?

Thanks

Chris

A lot of helpful replies already so I'll keep it short

With regards to insurance, the price for professional indemnity is likely to vary quite substantially depending what exactly you're doing, who exactly you're doing it for and other material facts such as the value of the contract you're involved with.

However, a lot of clients will tell you directly how much professional indemnity they want you to be covered by and potentially how much public liability.

Good luck with the new venture!

[flipFlop]

Do some contracts only pay when the contract has ended or is it a monthly payment?

Some contracts only pay when the contract has ended.

[malvolio]

Been thinking about that. Is it possible to join and be covered even after your contract's started and they haven't reviewed it? Or does it depend?

Only constraint is that an on-going investigation probably won't be covered - usually (there are always exceptions).

No reviews necessary, it's protecting an on-going business, not an individual contract, that's rather the whole point. And when they say "tax investigation", that's any tax investigation, including PAYE and VAT, personal or corporate.

Given the scope of the things covered and the discounts on other stuff, for the money it's a complete no brainer.