Contract Work - What do I need to do?

samwsmith1

I've just left uni and trying to find a job, at the moment I have the possibility of doing some IT contract work for a local firm for a month or so.

I've previously been a contractor to Lionbridge but they did all the invoices etc and paid me at the end of the month. However, I was self employed, is it just a case of re-registering again?

Also do I need to purchase any insurance or anything?

Thanks in advance for your replies.

paddyrg

I'd start off with an umbrella company who will again do the invoicing and pay you PAYE. They will provide the insurance and structure things so you're not deemed an employee. Works out better for everyone IMHO.

InsideInsurance

If its a small local company and they arent engaging a large job agency then most of it will be fairly informal and invoices are easy to create etc.

Insurance will depend on if you want to protect yourself or not and if your contract requires it. If you deal with any of the big companies, clients or agencies, then they will insist on PL and PI at an appropriate level and EL if applicable.

An umbrella will take all the pain away for you but will give you less ultimate money but then if this is a one off for 1 month any other option probably aint worth the headache

samwsmith1

Thank you to both of you for your replies.

It is a very local small (around 10 employees) company with no agency (I contacted them enquiring).
I'm meeting with the other managing director this week to discuss the work in further detail, I guess I'll find out what they have done with previous contractors then.

Will I not lose money by going through an umbrella company? With Lionbridge I was registered as self employed and had to fill a tax return in each year.

Edit: Although looking into Umbrella companies further it seems like it saves me the hassle of being self employed for a month and purchasing a years insurance.

InsideInsurance

samwsmith1 wrote: »

Will I not lose money by going through an umbrella company? With Lionbridge I was registered as self employed and had to fill a tax return in each year.

Edit: Although looking into Umbrella companies further it seems like it saves me the hassle of being self employed for a month and purchasing a years insurance.

Yes, as I say, it will mean slightly less take home pay but for a very short term contract its probably worth it for the lack of hassle.

If you were doing this long term, with this and other future clients, then I'd say to go down the limited company route (or look for an offshore scheme if you want to sail close to the wind)

samwsmith1

Thanks, I thought I'd update you.
I went in this afternoon and they asked me to start there and then. They have taken me on as a PAYE employee temporarily.

InsideInsurance

samwsmith1 wrote: »

They have taken me on as a PAYE employee temporarily.

If they have taken you on as a temp/fix term employee then you are probably best staying as that.

IR35 is the bogeyman used to scare young contractors but going from being an employee to being a contractor doing the same job at the same place is almost certainly going to be an issue with HMRC IF they look into it. By using an umbrella the risk would be lessened but even the most cavalier contractor wouldnt risk perm to contract and then being self employed or ltd.