Full time to contract work
Discussion
Hi all,
I'm considering doing this in the near future, being an ACCA qualified bean counter I think it makes sense, BUT the risk averse in me is saying no it's to much of a risk, with 3 months notice at my current employer there's the gap between notice period and actually getting a job, especially with children/mortgage etc. I do like my job and it pays pretty well, I just want to earn more and have more diversity. Has anyone else done this transition with ease? Based near Oxford if that's of any help.
Cheers
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I'm considering doing this in the near future, being an ACCA qualified bean counter I think it makes sense, BUT the risk averse in me is saying no it's to much of a risk, with 3 months notice at my current employer there's the gap between notice period and actually getting a job, especially with children/mortgage etc. I do like my job and it pays pretty well, I just want to earn more and have more diversity. Has anyone else done this transition with ease? Based near Oxford if that's of any help.
Cheers
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I would wholeheartedly recommend it if your post had been written more like this:
I made the move to contracting in 2004 and love it BTW and would not go back to PAYE, but its a different mindset.
Gregmitchell said:
I'm considering doing this in the near future, being an ACCA qualified bean counter with a specialist skillset that I can sell to clients for more than I currently earn. I think it makes sense, BUT the risk averse in me is saying no it's to much of a risk. I have 3 months notice at my current employer which I will use to set up my company and land my first contract role to start the day after I leave my PAYE job. I've researched rates and see that I can earn x% more, which will mean that I can suffer x days unpaid between roles - important with children/mortgage etc. I do like my job and it pays pretty well, I just want to earn more and have more diversity. Has anyone else done this transition with ease? Based near Oxford and have identified x potential clients within commutable distance, but happy to travel to where the work is and stay in hotels if the rate is right.
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As it wasn't, I would continue to enjoy the rewards of PAYE.Ad
I made the move to contracting in 2004 and love it BTW and would not go back to PAYE, but its a different mindset.
Some good advice there.
Contracting is a different mindset and is not for everyone, just like PAYE isn't for everyone. There are so many factors to consider but as touched on above, I'd recommend you approach it like any other business venture: do your market research; construct your plan; and redo your market research (at least two more times!). If the numbers stack up and you're prepared to travel then give it a go. If it doesn't work, one assumes you'll have little problem securing alternative PAYE employment.
Good luck!
Contracting is a different mindset and is not for everyone, just like PAYE isn't for everyone. There are so many factors to consider but as touched on above, I'd recommend you approach it like any other business venture: do your market research; construct your plan; and redo your market research (at least two more times!). If the numbers stack up and you're prepared to travel then give it a go. If it doesn't work, one assumes you'll have little problem securing alternative PAYE employment.
Good luck!
MrFappyFappy said:
98elise said:
Bear in mind that the government will soon remove the benefits of contracting.
???http://www.pistonheads.com/gassing/topic.asp?h=0&a...
and from Contractor UK
http://forums.contractoruk.com/general/110158-crac...
http://forums.contractoruk.com/future-contracting/...
The consensus seems to be that contracting as we know it will be gone very shortly.
sideways sid said:
I would wholeheartedly recommend it if your post had been written more like this:
I made the move to contracting in 2004 and love it BTW and would not go back to PAYE, but its a different mindset.
Agreed.Gregmitchell said:
I'm considering doing this in the near future, being an ACCA qualified bean counter with a specialist skillset that I can sell to clients for more than I currently earn. I think it makes sense, BUT the risk averse in me is saying no it's to much of a risk. I have 3 months notice at my current employer which I will use to set up my company and land my first contract role to start the day after I leave my PAYE job. I've researched rates and see that I can earn x% more, which will mean that I can suffer x days unpaid between roles - important with children/mortgage etc. I do like my job and it pays pretty well, I just want to earn more and have more diversity. Has anyone else done this transition with ease? Based near Oxford and have identified x potential clients within commutable distance, but happy to travel to where the work is and stay in hotels if the rate is right.
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As it wasn't, I would continue to enjoy the rewards of PAYE.Ad
I made the move to contracting in 2004 and love it BTW and would not go back to PAYE, but its a different mindset.
My last role started in London, then ended up in Exeter (pretty much living in a hotel). My current role started in London and has ended up in Watford (4 hours of commuting each day).
One thing I always say to people considering contracting is how concerned would you be if you were at risk of redundancy? What if it was certain you would be redundant in 3 or months, and you had just signed away all your employment rights? What if the next job you got also had redundancy looming?
If that would worry you then its not for you.
I got punted from my local engineering company, a months notice there you go after 4 years.
I went contracting and its the best decision I've ever made.
Pros
I earn double what I did before
I pay less tax
I get expenses for going to work
I fancy a trackday, I just don't go to work
I fancy a holiday, im going to be off next week, ok
I start and finish when I want,
It is hassle free,
cons
I'm on a weeks notice,
if im sick I don't get paid.
That's it really, I took exactly what I got at my previous job as pay, I've now got 6 months salary in the company account should work dry up.
When you consider, I've taken loads of holidays, and only been working for six months, and I've paid s
t less tax, wtf didn't I do this years ago.
I went contracting and its the best decision I've ever made.
Pros
I earn double what I did before
I pay less tax
I get expenses for going to work
I fancy a trackday, I just don't go to work
I fancy a holiday, im going to be off next week, ok
I start and finish when I want,
It is hassle free,
cons
I'm on a weeks notice,
if im sick I don't get paid.
That's it really, I took exactly what I got at my previous job as pay, I've now got 6 months salary in the company account should work dry up.
When you consider, I've taken loads of holidays, and only been working for six months, and I've paid s
t less tax, wtf didn't I do this years ago. it's all going to change, would recommend sitting tight for a few months until the government announces it's final view on IR35 and Travel and Subsistence tax relief.
The fact that we will have to pay more tax on dividends is neither here nor there if we have to do EVERYTHING through PAYE.
The fact that we will have to pay more tax on dividends is neither here nor there if we have to do EVERYTHING through PAYE.
pherlopolus said:
it's all going to change, would recommend sitting tight for a few months until the government announces it's final view on IR35 and Travel and Subsistence tax relief.
The fact that we will have to pay more tax on dividends is neither here nor there if we have to do EVERYTHING through PAYE.
I've been reading the same stuff for 15 years (it's probably been in the press for well over 15 years, but I've only been working contract for 15 years). It would be a major upset to both end-clients and contractors in several industries - it would likely lead to a movement of jobs overseas because the reason why end-clients hire contractors is because they do not want to hire employees. They don't want to hire employees because employees are expensive in downtimes and hard to fire. If you want to send jobs currently done by contractors somewhere else, then making contractors into employees would be a great way to do it. The fact that we will have to pay more tax on dividends is neither here nor there if we have to do EVERYTHING through PAYE.
creampuff said:
I've been reading the same stuff for 15 years (it's probably been in the press for well over 15 years, but I've only been working contract for 15 years). It would be a major upset to both end-clients and contractors in several industries - it would likely lead to a movement of jobs overseas because the reason why end-clients hire contractors is because they do not want to hire employees. They don't want to hire employees because employees are expensive in downtimes and hard to fire. If you want to send jobs currently done by contractors somewhere else, then making contractors into employees would be a great way to do it.
I actually agree, but nothing is cast in stone yet. I remember the fun when IR35 came in, and converted to permie for a bit after that (not because of though). I'm hoping they are aiming this at the low end of the market - rather than the high value Consultant/Contractors who just happen to work through a PSC. The thing is that most contractors cost the same to the end client as the equivalent permie, it's just that they get all the fringe/benefits as gross pay on an invoice.I don't actually take much more out of my LTD than I earned as a permie, but I am putting money aside for the unpaid holidays and the potential of having 4 months + off between contracts due to nothing being available. I do love the lifestyle though, and even if I had to shove everything through payroll would probably still carry on.
pherlopolus said:
I actually agree, but nothing is cast in stone yet. I remember the fun when IR35 came in, and converted to permie for a bit after that (not because of though). I'm hoping they are aiming this at the low end of the market - rather than the high value Consultant/Contractors who just happen to work through a PSC. The thing is that most contractors cost the same to the end client as the equivalent permie, it's just that they get all the fringe/benefits as gross pay on an invoice.
I don't actually take much more out of my LTD than I earned as a permie, but I am putting money aside for the unpaid holidays and the potential of having 4 months + off between contracts due to nothing being available. I do love the lifestyle though, and even if I had to shove everything through payroll would probably still carry on.
Thats exactly where i am on all this.I don't actually take much more out of my LTD than I earned as a permie, but I am putting money aside for the unpaid holidays and the potential of having 4 months + off between contracts due to nothing being available. I do love the lifestyle though, and even if I had to shove everything through payroll would probably still carry on.
I take roughly a third of my monthly income as a wage, but love the lifestyle. Working from home on this contract, but the previous two were on client site. The travel and subsistence charges would hit me hard if i was working on client site again, but it would still be worth it for me not to have the hassle and s
t of permie work AND i'd still be better off and work less hours.I did the transition 8 years ago. I was doing IT work for a government department at the time. Switched to doing that on contract (different client), then moved across to financial services.
In terms of day rates, for it to be worthwhile you need to be doubling your take home pay I would day. You need to take into account corporation tax, personal tax, expenses (e.g. accountant, travel) plus contingency money for gaps between contracts.
The main benefit (aside from financial) is not having to get involved in politics, promotions, appraisals, 360 degree feedback and the other baggage of being a permie.
Drawbacks - job security obviously, and sick days get very expensive. There's no more "I've got a sniffle, I'm gonna take the day off".
Having a good accountant is important, there are a lot of wrinkles in the system to navigate. Once you are up and running for a few months it becomes straightforward.
Would I go back to being a permie - only as a last resort.
In terms of day rates, for it to be worthwhile you need to be doubling your take home pay I would day. You need to take into account corporation tax, personal tax, expenses (e.g. accountant, travel) plus contingency money for gaps between contracts.
The main benefit (aside from financial) is not having to get involved in politics, promotions, appraisals, 360 degree feedback and the other baggage of being a permie.
Drawbacks - job security obviously, and sick days get very expensive. There's no more "I've got a sniffle, I'm gonna take the day off".
Having a good accountant is important, there are a lot of wrinkles in the system to navigate. Once you are up and running for a few months it becomes straightforward.
Would I go back to being a permie - only as a last resort.
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