IT Contracting - anyone here do it?

[DanielJames]

So today marks the start of my 6th week here. Really enjoyed it to be honest.

I've got a permanent job starting on the 15th of Oct, so will be hanging up my contracting gloves on the 10th.

The gap inbetween shall be spent at the Nurburgring!

Overall the experience has been good, the only downfall is actually getting paid. My Umbrella company Nasa are brilliant, but the company I'm working for's finance department are very slow on getting payments sent. I'm meant to be on weekly pay and so far have only had pay from the first 2 weeks... I'm not struggling financially so maybe they're doing me a favour if I get the cash in one lump!

[pherlopolus]

I hang my Permie hat up in 5 weeks (after 10 years)

Nervous twitch of trying to find a contract before christmas hasn't started yet. 10 Years redundancy pay effectively means I have my war chest of 9-10 months money ready to go though

[Too Late]

Hung my permy shoes up 9 months ago And wish I had done it sooner.

[pherlopolus]

I only went premiering 10 years ago due to having children, was contractor from 1993 to 2004 before then...

[oilslick]

DanielJames said:

So today marks the start of my 6th week here. Really enjoyed it to be honest.

I've got a permanent job starting on the 15th of Oct, so will be hanging up my contracting gloves on the 10th.

The gap inbetween shall be spent at the Nurburgring!

Overall the experience has been good, the only downfall is actually getting paid. My Umbrella company Nasa are brilliant, but the company I'm working for's finance department are very slow on getting payments sent. I'm meant to be on weekly pay and so far have only had pay from the first 2 weeks... I'm not struggling financially so maybe they're doing me a favour if I get the cash in one lump!

Glad the jump in going contracting is working out for you.

Are you working for an agency or are you direct to the client? If it's an agency this should be raising very serious red flags and you should be asking your umbrella why they're not chasing this for you. If an agency has cash flow problems then late payments are often the first sign, followed by no payment at all.

If you're not already a member I'd strongly suggest joining IPSE (formerly the Professional Contractors Group), who in addition to many other benefits provide insurances against agencies going under.

http://www.ipse.co.uk/member-benefits

[bigandclever]

DanielJames said:

So today marks the start of my 6th week here. Really enjoyed it to be honest.

I've got a permanent job starting on the 15th of Oct, so will be hanging up my contracting gloves on the 10th.

Have your umbrella explained the consequences for any travel expenses claims you have, considering this will be your only gig? Big assumption you are claiming, of course

[DanielJames]

bigandclever said:

Have your umbrella explained the consequences for any travel expenses claims you have, considering this will be your only gig? Big assumption you are claiming, of course

Nope, please explain? I was told to claim my mileage at around £12 per day, and meal allowance at £10 per day, but not entirely sure where that money goes. Tax reduction isn't it?

[Tonsko]

pespro said:

Hi all,

The only area i can think of is IT security, i know there is high demand for people with skills in this sector. But after looking around it seems without a Computer Science degree, there isn't much chance of learning the skills needed without this degree as a foundation. There are courses such as CCNA Security but without that degree it seems pointless.

I have a degree in Computing Networks. I didnt really enjoy it, it was boring, however i think if i became a network engineer it would be a lot more hands on than the Uni course was. But with no jobs doing network engineer etc i might struggle getting a job doing this.

IT Sec is one of those annoying things that initially it's tough to get a gig in it if you have no experience, but you can't get the experience without a role!

As it happens, we might be looking into hiring a junior, PM me if you're interested (Permie only though I'm afraid!)

Edited by Tonsko on Monday 29th September 23:06

[oilslick]

DanielJames said:

Nope, please explain? I was told to claim my mileage at around £12 per day, and meal allowance at £10 per day, but not entirely sure where that money goes. Tax reduction isn't it?

Umbrellas operate overarching contracts of employment. If you're only intending on undertaking one assignment under that contract then you're not entitled to claim any subsistence or travel expenses as HMRC consider it a permanent workplace.

Further details on page 3 on the link below:

https://www.professionalpassport.com/pdfs/Contract...

I suggest you talk to your umbrella company!

[DanielJames]

oilslick said:

Umbrellas operate overarching contracts of employment. If you're only intending on undertaking one assignment under that contract then you're not entitled to claim any subsistence or travel expenses as HMRC consider it a permanent workplace.

Further details on page 3 on the link below:

https://www.professionalpassport.com/pdfs/Contract...

I suggest you talk to your umbrella company!

I will call them tomorrow, thanks for bringing this to my attention!

[russ_a]

Just passed the first month and wished I had done this 10 years ago! Could have retired today!!

[bigandclever]

DanielJames said:

oilslick said:

Umbrellas operate overarching contracts of employment. If you're only intending on undertaking one assignment under that contract then you're not entitled to claim any subsistence or travel expenses as HMRC consider it a permanent workplace.

Further details on page 3 on the link below:

https://www.professionalpassport.com/pdfs/Contract...

I suggest you talk to your umbrella company!

I will call them tomorrow, thanks for bringing this to my attention!

It's not going to have a massive impact on you, given the timescales, but it's something that gets 'forgotten' about when the brollies are selling how great they are.

[DanielJames]

Well I'm back into permanent employment. If I was going to contract again I'd definitely go self employed/LTD compay route. I cant help but think the Umbrella company have screwed me a bit.

For example I've just been paid for my final 2 weeks, £150 a day so £1500 total. I received £840 from that.

What I perhaps underestimated is how sneeky you need to be to make it worthwhile with regard to expenses, and that I would need to pay not just my own NI but also that of the employer.

[Dr Jekyll]

DanielJames said:

For example I've just been paid for my final 2 weeks, £150 a day so £1500 total. I received £840 from that.

That's shocking I'd have expected £1000+. Where on earth did the remainder go?

[Gaspode]

Dr Jekyll said:

DanielJames said:

For example I've just been paid for my final 2 weeks, £150 a day so £1500 total. I received £840 from that.

That's shocking I'd have expected £1000+. Where on earth did the remainder go?

Indeed, that's very surprising. Not that I've ever used an umbrella, I set up a ltd company right from the start as the clients wanted to deal with a VAT-registered company.

[oilslick]

Dr Jekyll said:

That's shocking I'd have expected £1000+. Where on earth did the remainder go?

Assuming a tax code of 1000L deductions would be something like this:

Employer's NI 159.89
Employee's NI 88.35
Employee Tax 324.72
Umbrella Fee 80

[TheAngryDog]

oilslick said:

Dr Jekyll said:

That's shocking I'd have expected £1000+. Where on earth did the remainder go?

Assuming a tax code of 1000L deductions would be something like this:

Employer's NI 159.89
Employee's NI 88.35
Employee Tax 324.72
Umbrella Fee 80

That doesn't make contracting look worth while on £150 a day. Im on more than that as a permie.

[essayer]

TheAngryDog said:

That doesn't make contracting look worth while on £150 a day. Im on more than that as a permie.

That's going via an umbrella.

Via a ltd co;
£1500 for ten days - say £36000 invoiced per year (48 weeks)
pay a salary £8k ish
= £28k profit
less 20% corp tax and say £500pa accounting fees
= £21900

Assume you took all that as a dividend (tax free) then that's £29900 take home, or the equivalent of a £40k salary.

[TheAngryDog]

essayer said:

TheAngryDog said:

That doesn't make contracting look worth while on £150 a day. Im on more than that as a permie.

That's going via an umbrella.

Via a ltd co;
£1500 for ten days - say £36000 invoiced per year (48 weeks)
pay a salary £8k ish
= £28k profit
less 20% corp tax and say £500pa accounting fees
= £21900

Assume you took all that as a dividend (tax free) then that's £29900 take home, or the equivalent of a £40k salary.

That wouldnt be bad. I presume that this is at the lower end of the pay scales?

I want do take on contract work, but I also need to get a mortgage at some point, and the two arent compatible for the first few years. Plus I think I need to hone my skills more in the role I am in, annoyingly.

[Dr Jekyll]

TheAngryDog said:

That wouldnt be bad. I presume that this is at the lower end of the pay scales?

I want do take on contract work, but I also need to get a mortgage at some point, and the two arent compatible for the first few years. Plus I think I need to hone my skills more in the role I am in, annoyingly.

It's also dodging IR35, something I've never managed to do.