Reply to: Hard to find contracts?

[Scrag Meister]

Not sure I would recommend handing your notice in prior to looking, if you are on a months notice.

Most (I'm in London) are willing to accept 1 months notice before contract start, as reasonable if your skillset matches.

As it happens I did start contracting by handing my notice in, but I was on 3 months notice and however good you are 3 months is too long for the Client Co to wait. I was benched looking for 3 months after leaving, on the positive side this enabled me to be focussed on finding the exact roles, being available for making phones calls and attending interviews, I was looking for a specific niche of the banking industry than accepting any old tulip contract that came along. Started in 2007, just started my 2nd contract back in May.

Good luck in your search, its worth the effort.

[theroyale]

Also I like to work my butt off for 8-12 months then bog off somewhere for a few months - bit hard to do that as a permie.

Also i like to turn up, do my best possible effort for 8 hours, then go home - no performance reviews, no wage freezes, no other permie/HR crappola. Being a permie sucks.

Well said! It's exactly these things that are making me like this life. I couldn't STAND performance reviews and appraisals and all that sh*t when I was a permie - things are a lot cleaner here as a contractor.

AND average contract lengths of 3 months allow me to think season to season. I might work through the winter and think about taking the spring off. This is happiness

[ibnul]

Go for it, if you have the bottle. I will give you my own example:
I was earning 75k + bonus in an investment bank, and after all the deduction I was getting £4300 each month. I was barley living hand to mouth with only one house and 2 holidays annually
I did take the plunge on contracting some time ago and now I got 2 house, and at least 4 holdays a year. Yes some times are rough, like last year when I was benched for 4 months but those days you just tight your belt. Don't worry about company things as well, get a good accountant, and pay him/her for the job and they will sort all those things. As my accountant says, you keep earning and I will keep the taxman happy
I can tell you now life is better to be a contractor, as someone already says, no performance review (I still dreaded those 12 pages doc that has to be approved by my line manager 4 times a year). The only thing I miss is the "sicki" days, apart from that contracting rules

[rsingh]

[QUOTE=XLMonkey;

I don't do it just for the money. [/QUOTE]

No, you do it for a tulip load of money.

[XLMonkey]

ITContractorUK : re. the costs and benefits, if you send me a pm I have a spreadsheet to calculate the costs and revenue based on your own circumstances (a bit more detailed than the things on the contractor websites).

btw. I don't do it just for the money. But if it wasn't for the money, I wouldn't do it...

[rsingh]

Wow, that is exactly what someone who is thinking about contracting wants to hear!

What you want to hear and reality are completely different things. However, the only way you will settle your mind is if you take the plunge. Just go for it.

Don't worry about not currently having a contract. Just hand your notice in. It will help you focus. Get used to being a few weeks away from being canned.

Don't worry about the large number of applicants per role. The majority of applicants are tulipe.

If you are any good, you will be fine. This way, you will find out if you are cut out for it or whether you are yet another legend in your lunch time.

Let us know how you get on once you have handed your notice in.

[ITContractorUK]

Wow, that is exactly what someone who is thinking about contracting wants to hear!

[Stan.goodvibes]

I'm confused. I do it for the money. And the minimal tax. However I have multiple passports and am prepared to swap hemispheres for good pay (I would be in the UK now competing with you guys for roles except as commented on a different thread, rates are booming here in Oz, and with the pound so tulip it's more cost effective and enjoyable to be here).

Also I like to work my butt off for 8-12 months then bog off somewhere for a few months - bit hard to do that as a permie.

Also i like to turn up, do my best possible effort for 8 hours, then go home - no performance reviews, no wage freezes, no other permie/HR crappola. Being a permie sucks.

And running a company is a piece of p1ss , as long as you keep up to date with the paperwork.

So...

TAKE THE PLUNGE! Enjoy the challenge. Live a life thats different from the wages slaves. IF you want the big money then work hard, learn stuff, be agreeable and professional, and it will come to you one day.

Contracting rules!

[theroyale]

Me too. You don't need to be on PAYE and you can stay within the lower dividend threshold for tax efficiency.

Not in the above example I think - the lower dividend threshold as I understand it is 37400 pounds p.a.

[oversteer]

re. PAYE - You should be making national insurance contributions so your entitlement to state pension, benefits continues - IIRC you have to be paid over £110/week and so pay 11% (employee) and 13% (employer) NI contributions

That puts you within the income tax allowance, but about £1300/yr in NICs.

[Peter Loew]

With a salary of 6k I would have thought you avoid PAYE altogether?

Me too. You don't need to be on PAYE and you can stay within the lower dividend threshold for tax efficiency.

[theroyale]

OK - here's my rough calculation. It has the following assumptions:

1) You are operating as a limited company.

2) You are outside IR35.

3) You do not have any travelling expenses (obviously not true but seeing as you gave no indication of your travelling this is what I have assumed).

4) You take a salary of around £6k and the rest in dividends.

5) You don't make any company contributions to your pension.

6) You take out all of the distributible profit which you make every year.

7) Probably others which I haven't thought of...


£300/day for 45 weeks a year (allowing for holidays / bank holidays / sickness)
=> £67.5k

Salary of 6k, 1k of PAYE and other expenses (such as insurance), 1.5k on accountancy fees
=>£8.5k

Profit = £67.5 - £8.5 => £59k

Corporation tax @21% = £12.4k

Distributible Profit = £59k - £12.4k = £46.6k

If you took dividends up to the 40% tax band you would be able to take a gross amount of roughly £43k - £6k salary = £37k. Which (given the 10% tax credit) would leave a net dividend amount of 90% of £37k = £33.3k

Remaining distributible profit = £46.6k - £33.3k => £13.3k

This could be taken out as a gross dividend of £13.3/0.9 => £14.8

Tax on the dividend would be an extra 22.5% (because you are in the 40% tax band) = £14.8 * 0.225 => £3.3 k. So the net dividend (after all taxes) would be £13.3 - £3.3 => £10k

So, your total income would be £6k salary + £33.3k dividend + £10k dividend
=> £49.3k

This is equivalent to £4.1k a month.

With a salary of 6k I would have thought you avoid PAYE altogether?

[ITContractorUK]

I applied for 4 contract positions yesterday and just had a phone interview for one of them.
A 6 month contract (with probably another 6 months extension) worth £550/day..
Physical interview early next week. Interesting!

[eek]

Caveat to the above, I do not think you can run a car (total cost of ownership) for 25p or 40p a mile. I suppose you could argue you already own it, but presently I'm doing about an extra 800 miles a week that I wasn't doing 4 months ago until I got this contract. I don't think 25p/40p a mile covers the extra fuel and wear and tear.

What are you driving where £9000 (10,000 @ 40p a mile, 20,000 @ 25p a mile) does not cover the costs.

Personally when I've ended up in a situation like that I've minimised depreciation by purchasing a low mileage two - three year diesel upto say 30,000 miles ran it for 18 months and then repeated as required.

[Fred Bloggs]

Caveat to the above, I do not think you can run a car (total cost of ownership) for 25p or 40p a mile. I suppose you could argue you already own it, but presently I'm doing about an extra 800 miles a week that I wasn't doing 4 months ago until I got this contract. I don't think 25p/40p a mile covers the extra fuel and wear and tear.