Jumping to IT Contracting

[TRON]

Hey Guys!

Just saying hello to everyone. I'm quite happy to find this forum where I can possibly get some buddies and/or useful advice from seasoned mercenaries.

I'm another permie who decided to jump to the IT contractor vagon. I should have done it much earlier (I'm allergic to permie treatment) but IT contracting wasn't really popular in my country. Now I've been working in London for about a year and I've started reading about contracting details several times, spent days researching stuff reading contractoruk and mini-pdfs but I always got lost in the forest of taxation details and stuff like that. Still, I got a relatively good idea about how payment is structured, reasonable rates in my sector, IR35 problems, umbrella vs ltd, etc... But I'll never get into this if I don't jump into the deep water. I've registered here to fill in the gaps. Perhaps just for a kick in my ass along with some useful advices from members who once were in similar shoes.

My "short" intro and welcome ends here. Thanks for reading it up until this point. Now comes the boring part, only for people with strong nerves and a lot of patientce!

I'll list some more info and things that confuse me at the moment. Comments are welcome on any of them.

1. I'm a masochist and I'm going to start with an Ltd. (Later I want to do business anyway and I want to learn about this.) Maybe a bit stupid related question: Should I form the company now or I can leave it after securing a contract. Some sites suggest that forming a company and opening a business account is quick (if I wanted to postpone this). Although I wouldn't be sure about the speed of bank account creation based on my experience with my first UK bank account. On the other hand by forming it now and paying for a good account agency would help me to check contracts and I think I would seem to be more serious if I could respond to contract offers quickly (both verbally and officially).
   • Can you recommend an agency? I thought about starting out with SJD. They are a bit pricey compared to some others but their services and unlimited accountant support might come in handy for a beginner.
   • What do you think about IR35 insurance? For example the qdos one.
2. Currently I'm not working (no notice period) and I have saved money for 3-4 months living in London (zone 2). I think this will help a lot in finding IT gigs. I can show up in London City within 30-60minutes. IT related pain points:
   • I've done development in a lot of languages but the most relevant and fresh part of my ~10 year professional experience is about C/C++ projects that only partly overlap (backend/webservice development) with my current profile (python/django web). I've spent only the last year with django development (in London) as a permie on an in-house project so I don't have a personal public portfolio. How much problem will this cause? I'd still do great on an interview as mid-senior level django dev. Using my experience I've started putting together some smaller home projects that would demonstrate my django/tdd/web-api/angularjs skills but I'm not sure that I'll have the time to finish them and I'm not sure it is worth investing my time/energy in these.
   • Seasoned contractors get their gigs through networking. I think getting first gig sucks for many people without contractor connections. Where do you think it's best to get my first python/django gigs? I don't think that my first gig should suck in terms of rate but I'm prepared to accept a below average one. In such cases I will probably take only shorter term (~3month) projects. Did you have useful similar strategy or some other related advices?
   • Experience with freelancing vs in-office-contracting? Freelancing attracts me more but I'm afraid the lack of portfolio will attract in-office jobs more. I think I'll not care about IR35 status during my first contract.
   • Either on ukcontractor or itcontractor I've read some bullfeces about people wearing fine clothes and suits on interviews. I hope it was only a joke and contracting won't change this part of my life for the worse...

Should I just shut up, start forming the company and sending out applications to every relevant contract job ads as soon as possible?

[NotAllThere]

I always aim to dress slightly smarter than the permies. For interview, a suit is de-rigeur unless you're in some kind of trendy industry, since an interview is a formal affair.

My personal criteria for contracting are:
1. Can I make more money than permie?
2. Can I get away from office politics, appraisals and target setting?

Tax regimes change all the time - sometimes good for contractors (like the ability to claim T&S), sometimes bad for contractors (like the removal of the ability to claim T&S under some circumstances). The trick to maximising income is not minimising tax, but earn more.

[SueEllen]

Write up your CV and start applying for roles on job boards.

Then see what you can get.

Just because you live in zone 2 don't be surprised if some of your roles are further out. There are companies who have worked out they can save money on office space and business rates by being further out.

In regards to business accounts the bank you do your day to day banking with is the most likely to give you can account.

[cojak]

And regarding clothes, just be a bit smarter than the permies. There's no need to wear a tie. A pressed shirt and a jacket ought to work in most offices I've worked in recently.

[Beatrix Kiddo]

Hi, TRON. I'm also in the planning stages of making the change, and reading everything I can. Good luck to you.

My personal criteria for contracting are:
1. Can I make more money than permie?
2. Can I get away from office politics, appraisals and target setting

This, especially point 2, is what I'm looking for. I just want to do a good day's work, not pretend I want my boss's job (but not too much!). No more appraisals!

[TRON]

Thanks for all of your replies! I didn't even expect my thread to appear because some of my stupid questions, and because the forum seemed a bit strange for me by showing permission errors on my own profile/inbox/etc pages...

I always aim to dress slightly smarter than the permies. For interview, a suit is de-rigeur unless you're in some kind of trendy industry, since an interview is a formal affair.

I think I'll sport my black jeans + black shoes (not sport shoes) + black shirt + black sporty-but-elegant slim jacket (made from leather+textile, not a suit jacket) combo. It looks good and somewhat formal in a little bit Matrix-ish way. :-)

My personal criteria for contracting are:
1. Can I make more money than permie?
2. Can I get away from office politics, appraisals and target setting?

I HATE office politics. After arriving to London and finding out that contracting is an option I've realized that I'm a perfect prototype for IT contracting in many ways. I absolutely don't need other than a salary from an employer, I don't need ladder, parties, snacks, a "family" and/or a "yelling team", etc... On top of that I'm a self-educated born programmer, this will be ideal for living the lifestyle as a skilled mercenary developer. In the long term I want to switch not only to contracting, but to freelance work to avoid the office as much as possible (but that requires learning into another sector in the next year).

BTW, I've read that many contractors work in-house just like permies. Does this automatically mean that you are inside IR35? I just talked with a guy yesterday who told me that he knows many guys (in IT) who work together with permies in the office and still don't pay tax inside IR35, to be honest I was surprised.

I think the money thing is obvious, with no paid holidays, notice period etc you obviously have to earn more net salary. I'm really curious how can this be a good business for both the contractor and the employee when the contract is inside IR35. In many cases when I was doing the math and found that a contractor has to be more expensive for some companies. Maybe I'm just wrong or they have these positions for other reasons (like temp position with indefinite length, etc...)

And regarding clothes, just be a bit smarter than the permies. There's no need to wear a tie. A pressed shirt and a jacket ought to work in most offices I've worked in recently.

I'll try my Matrix costume and we'll see how they like it on the interview. In the typical Londoner tech-startup environments, the informal nerd-look is de-facto on interviews. On one occasion they told that my all-black clothes with the shirt was unusually formal. :-) During work I'll be likely to wear my usual all-balck clothes. I'm literally a black sheep anyway, even without contracting.

Write up your CV and start applying for roles on job boards.

Then see what you can get.

Just because you live in zone 2 don't be surprised if some of your roles are further out. There are companies who have worked out they can save money on office space and business rates by being further out.

In regards to business accounts the bank you do your day to day banking with is the most likely to give you can account.

In the next 1-2 days I wrap up my CV and start re-reading my interviewing notes. Do you think that starting the creation of the company at the same time is a good idea? With google I've found answers to this question but it seems that for most it depends on the "density" of their job market, that ultimatley depends on their profession and the area in which they are searching. For me IT in London is quite near to optimal I think that makes it safer to invest early in the company. Still, if it's easy and quick to form the company I might not want to set it up too early to save money.

This initial period sucks balls. I know that unfortunately a lot of my questions will be answered only by real life while I'm getting my hands dirty. It is very unlikely that someone with a similar profile and fresh experience pops up here to give me some approximate guide about job search... Actually applying for a few jobs just to see whether I get any signal back is harmless, in worst case I don't proceed with the interview. For permie roles I get 2 enquiries per week in London despite not searching for a job and being inactive for several months so I'll definitely have a fallback solution anyway if I fail finding contract work in the next 2 months.

Hi, TRON. I'm also in the planning stages of making the change, and reading everything I can. Good luck to you.

Thanks, have fun! I think I've already done my job with the theory part. The next step must be action.

[SueEllen]

Read the guides on the right under CUK Navigation. ---->

Then once you have done that and have more questions use Google to search this forum. Every question you have asked has been asked before and answered multiple times. As you are self taught you will be able to work out how.

[BrilloPad]

Hey Guys! Just saying hello to everyone.

a very warm welcome

get some buddies

If you want friends get a dog. Or marry one. Remember that all advice on here is free and you get what you pay for. There are vicious trolls around - watch your back.

advice from seasoned mercenaries.

Never bleed a radiator wearing your best gladiator costume.

[TRON]

Read the guides on the right under CUK Navigation. ---->

Then once you have done that and have more questions use Google to search this forum. Every question you have asked has been asked before and answered multiple times. As you are self taught you will be able to work out how.

Thank you, I've already worked it out. Before I posted my thread I've tried to search the forum with its builtin search and it was terrible. Found nothing, and that's why I created the thread. I think everyone spots the builtin search feature of the site earlier than the recommended google search under the "First Timer" page. If the builtin search doesn't work, it should be removed because it is confusing and will result in more unwanted threads and posts. After posting my thread but before it's appearance I found out that searching the forum with google is much better and found answers or partial answers to some of my questions.

Still, digging in a huge archive can be very time consuming and boring after some time. A lot of info isn't necessarily good, especially if some of that is old, possibly outdated, or the answer might be sensitive to some context. I've wasted quite a few days or weeks with digging for contracting info so I'll take action and ask my accountant and the right people at the company where I get the first gig. That will probably be a much more effective use of my time. Currently I have other things to do like preparing for interviews and working on some portfolio project. I think some of my questions are valid and by getting lucky I could have received some more specific advice from someone with a very similar profile. At least I don't think that my post is less useful than the one I quoted from you. You could have simply left this thread and post nothing.

In the future I might use this forum to discuss current/present things related to taxation, etc... Cheers

a very warm welcome

Hey!

Thanks for welcoming.

If you want friends get a dog. Or marry one. Remember that all advice on here is free and you get what you pay for. There are vicious trolls around - watch your back.

We seem to have very similar philosophy. My first impression is that we would understand each other.

[WTFH]

There are vicious trolls around - watch your back.

There are also less vicious trolls around.
Watch your front.


There are BMW drivers on here too.
Use your indicators.
It confuses them.


Pommer's Law applies.