IT Contracting - anyone here do it?

[Olivera]

ewenm said:

Flat rate VAT. I got a lesson from the HMRC man on this. You charge 20% on your invoices and then pay the flat rate percentage on the GROSS amount. For IT the rate is 14.5%, with a 1% discount on the first year down to 13.5%.

So you don't make the full 5.5% as the VAT is invoiced on the net amount but paid to HMRC on the Gross invoice amount.

Agreed, as also described in this example: http://www.contractoruk.com/vat/flat_rate.html

For those who have this wrong, I suggest you contact HMRC pronto as you have a lot of money to pay.

[Dog Star]

I contracted from 1992 to October 2012 (when my last client made me an offer I couldn't refuse to go perm). It's generally still ok but the relative rates are nothing like what they were back in those days, and the number of things you could do to ease the tax burden has reduced drastically.

I'd not willingly go back to contracting, but might have to if I got made redundant in my job. After so long I think maybe I'm just tired of it.

[essayer]

Has anyone mentioned agencies going bust yet? Because they do. No proper agency should get behind on payments and be prepared to walk if they do.

[NormalWisdom]

Been contracting since 2000, never had less than 4-week notice periods. Made the decision after a second redundancy - Never been out of work (involuntarily!) since (I have taken 2 or 3 6-month sabbaticals in that time - Another great advantage of contracting)

[Chest Rockwell]

casbar said:

Don't know what accountant you have, but you charge VAT at 20% and pay the revenue 14.5% per quarter, only VAT not total income. Total income is used to see if you can stay in the scheme. After the first year you pay 15.5% Look here for full details http://www.hmrc.gov.uk/vat/start/schemes/flat-rate...

I don't know what accountant they use either? But my VAT process is exactly as you describe and revenue paid per quarter.

[Chest Rockwell]

essayer said:

Has anyone mentioned agencies going bust yet? Because they do. No proper agency should get behind on payments and be prepared to walk if they do.

That's why you should join the PCG 'plus' membership scheme.

[IT1GTR]

Interesting thread, just about to make the jump from permie to contract myself (IT support, networking, infrastructure, project managing etc)

Got all of the ducks lined up (ltd co, business account etc) but only hurdle seems to be my 1 month notice period, a lot of the agencies want me to hand in my notice now before I have anything lined up which is a bit scary.


Does anyone have any recommended agencies or is it simply a case of scouring the job boards which is what I am doing atm?

[NormalWisdom]

IT1GTR said:

Got all of the ducks lined up (ltd co, business account etc) but only hurdle seems to be my 1 month notice period, a lot of the agencies want me to hand in my notice now before I have anything lined up which is a bit scary.

For your type of role this is not unusual at all. They usually look for immediate (take that to mean 2-10 days) start. Interview tomorrow, start the day after. More Senior/Strategic type roles may wait-out a notice period but even then possibly only 50% of the time.

[Chest Rockwell]

IT1GTR said:

Interesting thread, just about to make the jump from permie to contract myself (IT support, networking, infrastructure, project managing etc)

Got all of the ducks lined up (ltd co, business account etc) but only hurdle seems to be my 1 month notice period, a lot of the agencies want me to hand in my notice now before I have anything lined up which is a bit scary.


Does anyone have any recommended agencies or is it simply a case of scouring the job boards which is what I am doing atm?

Get your CV on Jobsite and update it everyday, such as change a word or 'and' to '&' somewhere in the text. That will keep your CV 'fresh' on Jobsite so it'll get noticed.

Don't bother with the advertised contractor roles, vast majority are fictional when it comes to IT Support. It's usually a CV and Reference collection exercise by agents. The real roles are via the phone, in other words the agent has a role, finds your CV, dispenses with the pleasantries and gets to the point pretty quickly. That's how you can tell there is a real contract on offer, the agent can smell money so it's balls to the wall to get the role filled PDQ.

However, some agents will find your CV and then take a punt on your potential naivety in order to extract previous employer details, particularly if you've come out of Permie-land. Things like "tell me about your previous roles" and "is [some manager's name] still working there?" the name of the game is to get a contact name out of you. They then contact your previous employers and try to push permie candidates. The other old chestnut is "I just need 2 references before I put you forward for the role"...they call that fishing.

I there is a real contract on the table, they will not bother with such questioning. It'll just be 'can you do xyz' and 'what daily rate do you expect'...always ask 'what's on offer?' OR just take a punt with what you want. If you fit the role but go in too high then the agent will tell you that and get you lower.

As for the resignation thing. Resign your permie job and then get your CV online 2 weeks before you leave. Do expect to not have a role to go to when you finish. But do expect to get more agent interest due to your "Immediate Start" status.

Just do it...and good luck.

[Dr Jekyll]

IT1GTR said:

a lot of the agencies want me to hand in my notice now before I have anything lined up which is a bit scary.

It is a bit scary, but bear in mind a lined up contract might suddenly disappear. Providing you aren't relying on your first contract to build up your rainy day fund it isn't really an issue.

[SimNugget]

May I ask you approx age?

I am a contractor myself, but if you are young and ambitious then large corporates can offer quite a lot of training, support and benefits.

If you are older, then PCG membership and a strong network are my recommendations.

Remember, jobs are only advertised when neither the client or agent knows anyone suitable - you need to be 'known' in your industry.

[IT1GTR]

SimNugget said:

May I ask you approx age?

I am a contractor myself, but if you are young and ambitious then large corporates can offer quite a lot of training, support and benefits.

If you are older, then PCG membership and a strong network are my recommendations.

Remember, jobs are only advertised when neither the client or agent knows anyone suitable - you need to be 'known' in your industry.

Me? If so I turned 30 this year

[Dog Star]

SimNugget said:

Remember, jobs are only advertised when neither the client or agent knows anyone suitable - you need to be 'known' in your industry.

Very true; in the last decade - so half - of my contracting career almost all of them were down to a. repeat business at the same client b. word of mouth recommendations.

[ewenm]

SimNugget said:

May I ask you approx age?

I am a contractor myself, but if you are young and ambitious then large corporates can offer quite a lot of training, support and benefits.

My "career" started with PwC Consulting then IBM Global Services giving a good foundation of training and experience before I decided I wanted greater flexibility than they could offer. To give IBM UK credit they did their best to try to work out a strategy so I could stay but still give more flexibility, but we couldn't agree. As it happens I've picked up various contracts since working with colleagues from my IBM days.

[Olivera]

Chest Rockwell said:

I don't know what accountant they use either? But my VAT process is exactly as you describe and revenue paid per quarter.

Please give us an example of how you calculate flat rate VAT due.

[Gaspode]

Olivera said:

ewenm said:

Flat rate VAT. I got a lesson from the HMRC man on this. You charge 20% on your invoices and then pay the flat rate percentage on the GROSS amount. For IT the rate is 14.5%, with a 1% discount on the first year down to 13.5%.

So you don't make the full 5.5% as the VAT is invoiced on the net amount but paid to HMRC on the Gross invoice amount.

Agreed, as also described in this example: http://www.contractoruk.com/vat/flat_rate.html

For those who have this wrong, I suggest you contact HMRC pronto as you have a lot of money to pay.

Yep, agreed, this is correct. I too had a lesson on how to do it right from the VAT inspector. I was subjected to a VAT inspection because of a cockup I had made on a different topic. The inspector was amazingly helpful, gave me all sorts of useful tips and training, and best of all figured out that I'd managed to overpay theme by £3k, which they promptly repaid. Which was nice.

[HereBeMonsters]

Used to do it, but for general support, it wasn't regular enough to warrant a "career" contracting, so I went permanent. Pick a company that has a good bonus scheme, good perks and is nice to work for.

The real money is in specialist IT and installation contracting.

[Pit Pony]

NormalWisdom said:

IT1GTR said:

Got all of the ducks lined up (ltd co, business account etc) but only hurdle seems to be my 1 month notice period, a lot of the agencies want me to hand in my notice now before I have anything lined up which is a bit scary.

For your type of role this is not unusual at all. They usually look for immediate (take that to mean 2-10 days) start. Interview tomorrow, start the day after. More Senior/Strategic type roles may wait-out a notice period but even then possibly only 50% of the time.

Last contract was due to finish on June 11th.
I only had to give a weeks notice.
I was told by hiring manager that he had been told to either turn contract staff into permies or not renew contract. That was about May 1st.
I started looking seriously, and by May 2nd I had 3 interviews lined up, Went to first one, and was offered it, and they wanted me to give my notice and start on May 12th. I suggested that once I had a contract, that was acceptable, and my security clearance had gone through I'd give current client notice. Within 2 hours I had the contract, and I got the information to them for security clearance back within 1 working day. 24 hours later, they told me I had security clearance, so I gave notice to finish on 14th, and I told the new agency I'd start on the 19th. (So I could have a couple of days off).

On the 15th the agency contacted me in a flap, because I appeared to have an unexplained employment gap which was impacting the security clearance, so I had to do one of the forms again, but specifically explaining what I was doing. On the 16th, I was told it had now gone through and I could start on the 19th.

Got there on the 19th and sat in reception until 11 am as they weren't ready for me (I charged them from the minute I walked into reception).

I have since found out that they didn't have anyone else suitable, and the RC's assertion that I had to agree to start ASAP or not get the contract was a bit of a red herring. Yes they were desperate, but they could have waited another 2 weeks.

[Chest Rockwell]

Olivera said:

Please give us an example of how you calculate flat rate VAT due.

No need, my accountant Nixon Williams deal with it, that's what I pay them to do for me. They're like the biggest out there, I think you'd see an uproar on Contractor UK if this VAT stuff was being mishandled by them.

[bigandclever]

Chest Rockwell said:

Olivera said:

Please give us an example of how you calculate flat rate VAT due.

No need, my accountant Nixon Williams deal with it, that's what I pay them to do for me. They're like the biggest out there, I think you'd see an uproar on Contractor UK if this VAT stuff was being mishandled by them.

Good job, because your understanding posted on here is incorrect.