Going Contract

cowclan138

Hi Everyone,

I have just been made redundant. Now I am think about contracting. (Never been contract before).
Can anyone advice me how to go about please?

Thx,

Cowclan138

dmg24

Can you elaborate on what you wish to know? You don't even say which industry you are in.

cowclan138

Thx for reply.
I work in IT industry. (Security Network, CheckPoint FW-1 and Cisco ASA).
When searching on jobserve, there are many jobs for contracting.
But I don't know where to start.
I.E, Do I need to start a company first? (how). And assuming I get a contract, what question should I ask?
Thx again for replying.
Cowclan138

Conor_3

You need to register as self employed and either do it as a sole trader or set up a Ltd company - plenty of howto guides online. You could use an umbrella company but they charge the earth for what they do.
Remember that you'll not get holiday pay, SSP or have any employment rights and that you can be fired on the spot.

Also you need to make sure you're not going to be in breach of IR35 as you could end up with HMRC giving you a lot of grief.

Caz3121

I work for a large IT organisation that use contractors - the company would normally go to an agency with the requirements and the agency will be the ones recruiting on Jobserve. These are normally for positions with a finite end eg a project for 6 months.

Might be worth chatting to one of the agencies that advertise re starting up on your own.

Don't be blown away by the pay as you have to factor in that, although it may look good, you may also have periods between contracts. You would also need to ensure that you stay up to date with technology changes with no employer to send you on a course. Saying that with a lot of the big corporations shedding permanent staff it may be the best way to stay in the industry until things are more stable.

briona

Hi Cowclan

I quit my full time job this summer to go freelance/contract, and despite a couple of quiet patches (namely Aug and Sep :rolleyes:), it's been ok. It's worth noting though that I do not have a mortgage or children, and if I did I would have to think long and hard before making this move. It can be VERY stressful when you have no idea where your next pay cheque is coming from! And even when you are earning, can you be sure you'll be paid on time? (I had to wait 60 days for payment from one of my freelance roles – NOT helpful!). Fortunately before quitting my job I made sure that I had about three months' salary saved up but that took a major hit within a very short space of time!

In the first instance I would get a CV together and send it to as many agencies as possible. Make sure you follow each email up with a call though – recruitment consultants will NOT chase you up.

It may seem like there are lots of jobs out there but if they are advertised by agencies, beware. Agencies frequently place speculative ads along the lines of "[Job role] freelancers/contractors urgently needed – great rates, apply today" when all they are really doing is sussing out whether any potential candidates are worth putting on their books.

If you intend to contract through an agency, by law they are now required to pay you a minimum of 20 days' holiday. Needless to say the actual paying out of this accrued holiday pay comes with strings attached – in my case, despite accruing holiday from the day I started work, I have to work for the agency for 13 weeks before they will pay out. :rolleyes:

The obvious benefit of going through an agency is that they deduct tax and NI at source, meaning that you won't be hit up with a nasty tax bill. I have also registered as self-employed though (and I pay Class 2 NI contributions on a quarterly basis) as otherwise I would have no way of accounting for my freelance earnings...

You have 3 months from the date you start working in which to register as self-employed, and failure to do so will result in a fine. If you work as a self-employed contractor you will need to pay the Class 2 NI contributions on demand, keep accurate and up-to-date records of everything you earn or buy for work-related purposes, and put aside 25-30% of all earnings for your tax bill.

I have to say I like contracting (though it's easy to say that when currently employed! ) – I get to work less, earn more and have more holidays! If you can handle periods of unemployment and not get too stressed out, I'd certainly recommend it!

Briona

cowclan138

Thx for all your help guys.

SomeBozo

You could use an umbrella company but they charge the earth for what they do.

Don't agree with this Conor.

The agency we use charge £13 a week, reduced to about £9 with relief. Giving this stops the need to do self assessement returns etc I think its worth it.

If the OP wants the name of the company, he can PM me.

Bozo