IT Contracting
 

My employers have offered a generous redundancy package that I've accepted and now I'm 'in the market' as it were for a job.

I was wondering if anyone else has moved into contracting services for the IT industry? The pay rates seem very good and I've already had some interest in my services from the people running the project I'm already working on (although I hate the job the thought of doing it for 2-3 times the pay makes it seem rather attractive).

I understand I need to create a LTD company as well?

Any advice?

Re: IT Contracting
 

this is getting silly, the number of them.
any similarities in the ip used / email address ?

Re: IT Contracting
 

I'm not a robot. Honestly.

Neg rep wouldn't hurt a robot.

Re: IT Contracting
 

Here consultants get paid £500 per half-day to do the job I do. :(

Obviously there's disadvantages - primarily you have no guarantee of income. I have thought of doing something similar but I would only do so if I had 6-12 months money to live off (presuming zero income in the meantime) and a reasonable client list to work from.

Remember that once you get work you're not necessarily going to get any money from them until some point into the work and even then you might have to chase their payments payable department every day of your life until they pay (it might help if you have someone to do it). Also remember that while you might be a shit hot techie / programmer / whatever, you might not necessarily be a very good sales person or money manager.

Re: IT Contracting
 

someone didn't look at the post count eh?

Re: IT Contracting
 

Thanks Dante,

Money is not a problem for 12-18 months ( I've waited flippin years to be able to say that).

I reckon I could get £250 to £300 a day for software testing/analysis but it's the whole LTD CO/Tax/Billing side that concearns me. Maybe a chat with an accountant may be the way forward unless anyone can offer some advice based on practical experience.

Re: IT Contracting
 

March regdate, 36 posts. The icon is just unfortunate this time.

Re: IT Contracting
 

There are a number of Ltd Co Providers you can go through who manage it all for you for a fee, who will take you through everything and tell you if it works out better off for you. I know one of the ones my company uses do a lot of work for IT contractors and if you like I can give you the number of their intro team who can take you through everything (this doesn't get me anything at all, I just know I wouldn't even know where to start looking for these kinds of companies).

Alternatively you can try to learn all about tax and allowances and do it yourself, but its one hell of a task.

I know it means they can write off a lot of your expenses against tax, and I am reassured that it is all done legally (there are many Ltd Co. Providers who do offshore tax fiddles that can get you in a lot of trouble, and my company doesn't deal with them at all, the 3 we will use are all completely legit, and I know at least 1 provides full insurance and support - ie they do all the paperwork for you - should the revenoo come round wanting to know all your finances)

I have had it demonstrated that anyone earning over about £15 an hour, with at least (I think it was) 30 hours a week is better off this way - but for those of you thinking you earn more than this, it only works for temp workers or contracted staff - as soon as you are permanent or considered perm (over 2 years in one location) you lose quite a lot of the allowances.

Let me know if you want the numbers of the companies we use and I can pick them up in the office tomorrow. However, they are currently looking at the VAT laws or something which may change the viability of these arrangements - we are currently being told not to suggest them to our temps, but then as it is totally flexible anyway you may want to go this way for now and then see what happens.

Re: IT Contracting
 

Perhaps he should've read the last two threads that had the same icon, and gone with a different one so we all didn't look at it on the overview and think, "Oh great another bot thread."

Re: IT Contracting
 

Is this a guarantee of work though? And within how many companies? What if they experience a slump? If they've got such a definite amount of work coming why don't they just employ someone permanently (at half that rate)? Etc.

As I say, we have a couple of consultants we use to do database stuff our IT department can't be arsed to do. They are not particularly gifted or anything (they simply have experience with our systems) but their rates as mentioned are still fairly good.

In previous years they were getting a fair amount of work through us but then this year our group centre asked for costs to be lowered and the budgets for use of consultants dropped dramatically as one of the first things to go. While I'm not crying for them particularly it did make me glad to have a guaranteed salary / sick pay / etc.

I think one of them now works part-time somewhere else and then does our stuff on the side which seems one way of trying to get the best of both worlds.

Tax & legal issues you should obviously seek independence advice or follow up Ebany's contacts (or both) but billing doesn't seem to be particularly difficult to manage. So long as you're explicit with the client as to what they're paying for, what support you're offering, for how long, etc.

A lot of even small firms seem to split the labour into three. One to be the sales person (promise the earth, give them the bullshit), two the guy who handles most of the actual work and finally someone who cares about money and is happy to bitch at accounts departments forever. If you're doing all three roles yourself then not only will you be time-pressured but you may sour relationships. Some contractors we've used in the past have simply been blacklisted (effectively) for losing their rag excessively over late payments.

I also wouldn't underestimate the "schmoozing" / sales element of being a contractor - a good part of the thing that determines whether our contractors / consultants get work (both in IT and in maintenance, where I work) is not just how efficient they are, but how "nice" they are. I'm not talking bribes here, but if you're the guy whose always known as both reliable, efficient and someone whose a pleasure to do business with you'll do better than just being an ill-tempered genius. The other thing that stops me being a consultant is that on a Monday morning after a heavy weekend I don't think I could put on my "Yes of course I'll suck your cock Mr Director Sir, where shall I send the invoice?" voice too often during sales pitches.

Re: IT Contracting
 

Setting up the .ltd company is definately the way to go, split the shares between yourself and some close(trusted) friends/family members who will let you draw down dividends in their name which will save you a small fortune in taxation.

Whilst setting up a company is just a case of filling in a few forms farming this work out is recommended, most accountants will take on the role of company secretary for around ?250-400 per year.

Company accounts can be produced for around ?500-750 (keep all your invoices and receipts organised to keep the cost down)

If you have any other questions feel free to fire away, i've been involved with a number of company's at boardroom level so might be able to give you some pointers.
________
Avandia heart attack

Re: IT Contracting
 

That sounds like something that could get me a very large tax bill if the Inland Revenue picks up on it. :confused:

I think the accountant is my first port of call.

To everyone who's offered advice - Thankyou.

Re: IT Contracting
 

btw remember - self employed = bugger all credit rating :-(