Reply to: Previous contractor looking to return

[TheDude]

If you are looking for Java and C# contracts there are a lot of piranhas in the tank.

If you are looking for C++ contracts then you have to be among the best.

[TheDude]

This is the most important post so far on this thread - Inside IR35 has killed contracting and the take home pay. I spoke to someone yesterday who was working at a french bank in london - His day rate was £600 and always outside IR35 meaning he can pay his wife a salary and optimise tax.

One man band single client contractors who paid their partners a salary for 30 mins paperwork a month are one of the reasons we have IR35 in the first place.

Even if they were doing full company accounts as well that doesn't justify £12.5k PA.

[northernladuk]

I closed my last contracting company in 2016 and my accountant is now retired, so my plan is to use Gorilla Accounting for both my accounts and company formation, but have some questions.

1. Does Gorilla's suggested £8k salary sound sensible?
2. I'm close to the pension lifetime allowance but my wife isn't. Can my company make a contribution to her pension? Is this less likely to be challenged by HMRC if she also takes a small salary?
3. I'm intending to work around 26 weeks per year so total company income will be around £65k gross. Should I pay divis or retain in the company for a capital distribution at closure?
4. Any suggestions for company bank accounts?
5. Any suggestions for company insurance?

Lots of questions I know, so thanks so much in advance!

So engage Gorilla and then ask them all these questions.

Also search the forums using the google method. Insuarance and bank accounts have been done ad infinitum. In google <keywords> site:forums.contractoruk.com
Can a limited company make pension payments to reduce it's CT to some random person not connected to the company? Let me think about that one.

[trashy]

Time for an update.

I ended up staying in my permie role until December 2021, at which point I joined a startup (again as a permie). Interesting tech and good people, but I decided that the company's future wasn't quite as bright as hoped and resigned last week whilst my notice period was still only one week.

The contract market for QA managers that have good hands-on skills seems better than March 2021 as I now have two offers, both outside IR35, both around £500 per day. I really like one of the companies so I think I'm going to say yes

I closed my last contracting company in 2016 and my accountant is now retired, so my plan is to use Gorilla Accounting for both my accounts and company formation, but have some questions.

1. Does Gorilla's suggested £8k salary sound sensible?
2. I'm close to the pension lifetime allowance but my wife isn't. Can my company make a contribution to her pension? Is this less likely to be challenged by HMRC if she also takes a small salary?
3. I'm intending to work around 26 weeks per year so total company income will be around £65k gross. Should I pay divis or retain in the company for a capital distribution at closure?
4. Any suggestions for company bank accounts?
5. Any suggestions for company insurance?

Lots of questions I know, so thanks so much in advance!

[northernladuk]

"As a dev - plenty of outside roles to chose from, if you focus on those and tell foxtrot oscar to agents with inside roles" <- more good advice[/I]

I don't think it is. There is certainly no where near the number or outside roles than before and they will be going to highly skilled current contractors. You are on the back foot coming back and not doing it in your last role. Nothing wrong with inside roles. Don't pay as much granted but that can be offset with pensions etc and it's only short term. Sitting on the bench for a month waiting for an outside is going to reduce your income much more than going inside.

The new world will be more inside than out so telling agents to FO when they have inside roles is a poor approach IMO.

[trashy]

Great advice and observations in this thread. Thank you so much.

"It's certainly the worst period for us in decades" <- yep, around 9/11 was pretty bad too

"Contracting isn't all about the money." <- thank goodness

"Most contractors were never running a business anyway." <- true

"very poor quality technical testers without technical knowledge" <- as a hiring manager I am consistently disappointed at the lack of knowledge

"the industry is going through a phase of thinking it doesn't need dedicated testers." <- perhaps related to the low overall quality of the technical testers?

"Testing/Technical Testing/Test Automation is not as attractive as it was." <- wasn't attractive for long was it?

"You should have stayed in development but it's not late if you are confident of your dev skills." <- very good point, has made me think

"Why not put your day rate up and wait for the decent projects to start?" <- good advice

"As a dev - plenty of outside roles to chose from, if you focus on those and tell foxtrot oscar to agents with inside roles" <- more good advice

[SussexSeagull]

As said previously the industry is going through a phase of thinking it doesn't need dedicated testers. In times of trouble clients seem to retreat to a comfort zone of getting developers to do more and more analysis and testing, which isn't really their field and stops them developing.

Automation gives you a few more options as some people think you can just code your way out of any problems and forget you need someone designing the tests first.

That all said the test market seem to have started up again in the last month. As has happened before there seems to be a lag after development picks up.

[BigDataPro]

...
In my view these are my main options:

1) Persist with looking for a technical tester contract
2) Refresh my C# skills and look for a C# dev contract
3) Refresh my Java skills and look for a Java dev contract
...

1. You might find it very difficult, albeit having seen very poor quality technical testers without a technical knowledge.
2. & 3. These days you need solid skills in more than 1 language. e.g Java+Scala (and Kafka) or C# + .Net + Powershell

If your choice is C# => train yourself in Azure + DevOps
If your choice is Java => train yourself in Azure/AWS/GCP + Kafka + DevOps

Might take some time but work wise challenges and contracts are abundant. Of course everything depends on How good you are technically!

[northernladuk]

Best best it to check Jobserve and linkedin and see what is around for you then.

[trashy]

Thanks guys! I didn't expect such prompt and considered answers

I'm in the fortunate position of being able to retire reasonably comfortably if I wanted to BUT I do still enjoy technical challenges so would like to carry on if possible.

Although I've been sheltered as a permie for the last few years I don't think I've quite been living under a rock! I fully understand that the number of available roles, rates and tax conditions aren't great and likely won't recover before I retire.

In my view these are my main options:

1) Persist with looking for a technical tester contract
2) Refresh my C# skills and look for a C# dev contract
3) Refresh my Java skills and look for a Java dev contract

I would like to have 3 months off per year (to recharge and reflect) so permanent roles won't work for me.

I'm fed up with management so would like a largely technical role.

I'm tempted to resign soon, take the summer off and then start looking in earnest later in the year.

The rate doesn't have to be great - the challenges, company business area and people are more important to me nowadays.

***********

BTW, I've seen a gradual decline in rates since the turn of the century. Here's a rough summary of my rates over time (they were all per hour but I've multiplied by 8 to get a day rate). I never "chased" the best rate.

1995 Visual C++ £280
1997 Visual C++ £320
1998 Visual C++ £360
2001 Java £680
2002 C# £520
2005 VB.NET £480
2015 C# £440

[northernladuk]

No it hasn't. And no it hasn't.
Contracting isn't all about the money.
Most contractors were never running a business anyway.
Rates are going up for inside roles if the candidate is desired by the client.
There are still outside roles.

But he's got a point. The market has been getting flatter for many years as more people jump in to contracting. I recall a number of threads about testers not being able to get gigs for a start. It's wrong of NPOUK to say it's killed contracting but it's also wrong to to say no it hasn't. It's certainly the worst period for us in decades. All the uncertainty and the many roles switching to FTC's and inside. The number out outside roles as the OP remembers will be vastly reduced. Not all rates are going up either and I suspect that will be short term to retain the existing contractors. Once they realise they can get the same level people for the old rates they'll slide back down.

So not the best time to go contracting, but then there never was really.

[Lance]

This is the most important post so far on this thread - Inside IR35 has killed contracting and the take home pay. I spoke to someone yesterday who was working at a french bank in london - His day rate was £600 and always outside IR35 meaning he can pay his wife a salary and optimise tax.

From 1 April all contractors have to go inside IR35 and the drop in take home is huge after employer NI and apprentice levy and no ability to build a warchest in the Ltd and avoid 40% tax. Even without IR35 the changes to dividend tax made it bad but now its really not worth it. Run the numbers and you will see for yourself sadly.

No it hasn't. And no it hasn't.
Contracting isn't all about the money.
Most contractors were never running a business anyway.
Rates are going up for inside roles if the candidate is desired by the client.
There are still outside roles.

[BigDataPro]

Testing/Technical Testing/Test Automation is not as attractive as it was. Main reason why I moved into Data Engineering (the doing side not the managing side). I am same age as you but I moved about 4-5 years ago.

You should have stayed in development but it's not late if you are confident of your dev skills. Development always gets you something, either Perm or Contract.

[NowPermOutsideUK]

Most contracts you find will fall within IR35 so you won't be bringing in as much money as 5 years ago.

You are better of finding another permanent job with decent employer pension contributions until people won't employ you due to age discrimination. (Yes it still exists even though it is illegal.)

I've had conversations with older permies and they say they just move around until they find an employer they like. Then they stay until they piss them off or can retire. This is why you want decent employer pension contributions.

This is the most important post so far on this thread - Inside IR35 has killed contracting and the take home pay. I spoke to someone yesterday who was working at a french bank in london - His day rate was £600 and always outside IR35 meaning he can pay his wife a salary and optimise tax.

From 1 April all contractors have to go inside IR35 and the drop in take home is huge after employer NI and apprentice levy and no ability to build a warchest in the Ltd and avoid 40% tax. Even without IR35 the changes to dividend tax made it bad but now its really not worth it. Run the numbers and you will see for yourself sadly.

[Lance]

A little bit of history:
* I was a contractor for 20 years - C++, Java and C# development
* Last 5 years I've been permanent - hands-on test automation (Java, REST-Assured, Selenium, Appium, Sauce Labs, etc) and performance testing (NeoLoad, Gatling, etc)

I've been promoted a few times but I'm starting to get tired of line management, interviewing, setting strategy, etc and look back fondly on my contractor days.

However, I've sent my CV for about a dozen well-matched roles on JobServe with zero response.

Is the market really that bad for technical testers?
Is it possible to have too much experience? Am I too old at 52?
Should I switch back to development?

Any advice appreciated!

you're not too old, but you have been living under a rock it seems. The market is not the most buoyant right now.

Don't put your age on your CV for a start. Or your DOB.
Testing is still used but would appear to be out of favour a little, possibly because project managers have learnt your terms (unit tests, test plan etc.), stick them in a plan, and expect non-testers to do it. It doesn't work very well, but try getting someone to spend £600 a day on a decent test manager when they think they have it covered.
Development will be an easier ride but not necessarily the right one. Why not put your day rate up and wait for the decent projects to start? Stop scratting around looking for anything.