Reply to: New to contracting, what would you do ?

[drob1984]

Welcome to the world of contracting. In a way you are fortunate in that you haven't been used to the "golden years" of contracting and are starting a'fresh.

In your shoes, I'd find a good umbrella org that suits your requirements. For me, its all about paying into my own SIPP (pension control is important to me). So for me there are 2 that meet that requirement, Paystream and Nasa.

I wouldn't even think about a limited company as I reckon for at least the next 2 years, Outside IR35 contracts via a PSC will represent less than 1% of the contract market. I think no-PSCs will be the norm. Lots of contractors have worked via umbrella's for years and its been a perfectly legitimate way to operate if you're less bothered about expenses, overheads of running a business and just want to get paid.

This is my plan. I am leaving my current engagement/client, taking some time out and I may go back to them "in time" as umbrella under a new SoW, job title and engagement. In the mean time.... painting/training/exams/holiday.

[DSF70]

Yes, but the OP said he had an offer.

Heard that a Financial Services company in Swindon, we’re preparing to offer 1 year extensions (inside IR35) for some of their contractors on a big migration programme, and served them notice a couple of days later.

Just waiting for my official notice that I’m going too as cutbacks on several programmes taking place. Expect to hear tomorrow.

I’ve had a good run, got enough to keep me off the streets for a few years!!!

[BolshieBastard]

Hi all.

This is my first post and I can see there is generally a lot of information around IR35 on the forums and I have had a good look through. It has been very helpful.

My situation is that I am PAYE at present. As part of the strategy I am working to, becoming a contractor early 2020 is the plan, but of course the IR35 changes have got me thinking.

I do not have a limited company (but could set one up) as of yet and I have been made my first contract offer for 6 months, Inside the IR35 and the recruiter is promoting using umbrella.

Should I be going down that route as I am first timer or should I still be setting up an Ltd company as I would have in 2018 2019 per say?

I would love to hear the thoughts of those who are more experienced in this field that I am.

Thanks in advance, Alan

If you've been offered your first contract and it's inside, there's little point forming a limited at this point as you'll just be incurring accountants fees with nothing going into the company.

Using an umbrella is often the best way for new contractors because if they dont like the lifestyle, there's no real costs to going back permie. In any event, I wouldnt be as confident as others who think lots or outside IR35 roles are going to appear by the truckload in 12 - 24 months time.

I would strongly advise you do due dilligence on the umbrella you use and make sure it isnt offering 85% or more of your contract is paid to you. You may be getting caught up in avoidance schemes and they are a whole heap of stuff you need to avoid.

[northernladuk]

Yes, but the OP said he had an offer.

So he's got nothing yet

[fidot]

Best approach is to find a contract 1st then decide based on circumstances


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Yes, but the OP said he had an offer.

[GhostofTarbera]

As per the rest of the replies, umbrella seems the best approach if you are determined to give contracting a try.

However, I wouldn't necessarily go with the umbrella recommended by the agency. I recommend doing your own research.

Eg if pension contributions are important to you, find an umbrella that supports salary sacrifice.

Best approach is to find a contract 1st then decide based on circumstances


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[fidot]

As per the rest of the replies, umbrella seems the best approach if you are determined to give contracting a try.

However, I wouldn't necessarily go with the umbrella recommended by the agency. I recommend doing your own research.

Eg if pension contributions are important to you, find an umbrella that supports salary sacrifice.

[WordIsBond]

In addition to what I already know, I will make sure I know everything else discussed here and much more.

Sounds like a formula to turn one insane.

In brief, there's no absolutely no reason to form a Ltd if you are going to be inside. There might be reasons for someone who already has a Ltd to keep it, at least for a while, if they are going to be inside IR35, but no reason for someone just starting out to form one.

Go brolly, get into contracting, if the world starts to change and more outside contracts start to come up, you might want your own company then. For now, get into the contracting lifestyle and see if you actually like it and want to keep doing it, without all the hassles of a Ltd Co that would be of no real benefit, and actually cost you something. Just go brolly.

[AlanPs1]

It's not really.

You need to know everything else discussed and much much more.

For your benefit, I will change my reply to "Thanks, this is what I needed to 'get my head round' !"

In addition to what I already know, I will make sure I know everything else discussed here and much more. I just wanted to get my head round that aspect of things really as I couldn't quite get a direct answer from those I had been speaking to but they're all old hats.

Thanks

[northernladuk]

Thanks, this is what I needed to know really!

It's not really.

You need to know everything else discussed and much much more.

[AlanPs1]

Established contractors will not have a choice if inside IR35 by agent/client as forced to go umbrella


The other option is to turn down the contract



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Thanks, this is what I needed to know really!

[DevUK]

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

This forum is full of answers to all of that. So I don't mean to be funny but have a good search around. Few good threads around the state of the market and what other contractors are doing in response.

If you're going straight to inside your situation's not really subject to the same concern as many others' here. In terms of the (suggested) risk of continuing on a contract that was previously determined outside to now, all of a sudden, be determined inside (by the client). You're just going straight inside, so you don't have that risk. What you will find is relevant to your situation in this forum is the current state of the market and what comes after your 6 month gig. People are struggling to land the kind of contract that, in my experience/sector at least, was in abundance 8 months ago. There's a lot of hype both on here and linkedin etc. around the "contractor exodus" and how it's ended contracting. I think all that's a bit heavy, but there is undoubtedly a hit to the market. The demand is there, the market isn't - something will give.

You should make up your own mind on the direction in which you see the market going and whether that works for you. Personally, I have mouths to feed, and I have lost faith in the 'outside' market sorting itself out before my war chest empties. So I've gone perm on a decent salary and placing my bets nice and early. I've gone through tough/quiet times as you do, naturally, as a business owner - but I think this time it's a bit different.

A seasoned contractor even slightly clued up on ir35 will be daft to switch inside without a new contract. Despite HMRC's assurances, that would be madness.

[GhostofTarbera]

New to contracting, what would you do ?

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

Established contractors will not have a choice if inside IR35 by agent/client as forced to go umbrella


The other option is to turn down the contract



Sent from my iPhone using Contractor UK Forum

[AlanPs1]

Good luck with it mate.

It doesn't, to me, sound like you need a ltd company - so I'm not sure why you would yet create one. If you plan to trade from a ltd company too and engage as a 'real' business then you obviously need one. If you're just looking to work inside gigs, you don't. The recruiter's recommended advice of umbrella is absolutely the right one, all things considered.

Thank you for your input. I guess I am also trying to get my head round what established contractors will be doing this year too. Will they go umbrella when asked to work inside IR35 or what do they do?

What I have been offered is inside IR35, it's more than double pay compared to what I get PAYE, even with Umbrella and it's exactly the type of projects I want to be part of. So I think I try it out before re-evaluating after 6 months.

[DevUK]

Hi all.

This is my first post and I can see there is generally a lot of information around IR35 on the forums and I have had a good look through. It has been very helpful.

My situation is that I am PAYE at present. As part of the strategy I am working to, becoming a contractor early 2020 is the plan, but of course the IR35 changes have got me thinking.

I do not have a limited company (but could set one up) as of yet and I have been made my first contract offer for 6 months, Inside the IR35 and the recruiter is promoting using umbrella.

Should I be going down that route as I am first timer or should I still be setting up an Ltd company as I would have in 2018 2019 per say?

I would love to hear the thoughts of those who are more experienced in this field that I am.

Thanks in advance, Alan

Good luck with it mate.

It doesn't, to me, sound like you need a ltd company - so I'm not sure why you would yet create one. If you plan to trade from a ltd company too and engage as a 'real' business then you obviously need one. If you're just looking to work inside gigs, you don't. The recruiter's recommended advice of umbrella is absolutely the right one, all things considered.