Contracting IR35 Etc Advice?
Discussion
Hi all,
looking at making the big leap into contracting.
I've read lots about the IR35 issue, I was wondering if any I.T contractors here could offer me any advice on what they have found to be the best way to play this, whilst making sure they are 100% watertight for the I.R?
Obviously I can appreciate that most will not want to discuss here, so please mail me if you can offer any advice
Many thanks for your help.
looking at making the big leap into contracting.
I've read lots about the IR35 issue, I was wondering if any I.T contractors here could offer me any advice on what they have found to be the best way to play this, whilst making sure they are 100% watertight for the I.R?
Obviously I can appreciate that most will not want to discuss here, so please mail me if you can offer any advice
Many thanks for your help.
The best way to avoid IR35 is not to live and work in the UK 
If that's not an option then join the PCG www.pcg.org.uk/ and try to get the agent/client to use one of their standard contracts. Failing that get one of their recommended accountants to review the contract for IR35. They will indicate any clauses that would point towards IR35 and you can negotiate with the client to have those clauses changed (hopefully).
>> Edited by t1grm on Sunday 11th July 19:46
If that's not an option then join the PCG www.pcg.org.uk/ and try to get the agent/client to use one of their standard contracts. Failing that get one of their recommended accountants to review the contract for IR35. They will indicate any clauses that would point towards IR35 and you can negotiate with the client to have those clauses changed (hopefully).
>> Edited by t1grm on Sunday 11th July 19:46
Thanks for the advice T1, everyone seems to recommend the PCG so I'll go for that.
As for contracting being "dead" I know several people in very lucrative contracts (in most cases paying ir35) that would earn a pittance in perm roles so I'm inclined to disagree.
The recent upturn in rates and quantity of contracts in my area has made me sit up and take notice
As for contracting being "dead" I know several people in very lucrative contracts (in most cases paying ir35) that would earn a pittance in perm roles so I'm inclined to disagree.
The recent upturn in rates and quantity of contracts in my area has made me sit up and take notice
dontlift said:
looking at making the big leap into contracting.
If you want my advice - dont bother, it contracting in the UK is all but dead
Bit of a sweeping statement. Depends what field you’re in. If you’re a C++ developer then maybe, they’re 2 to a penny nowadays (if you can find work that hasn’t been subbed out to India). However there are plenty of fields where there is still demand. Applications consultants for one (Oracle, SAP etc). Training is another. A mate of mine is an IBM websphere consultant and is earning a fortune (even by contractors standards) and is fielding calls for other work all the time.
JonRB said:
t1grm said:
If you’re a C++ developer then maybe, they’re 2 to a penny nowadays
Can't say I agree with you there. Good C++ developers are still sought after and worth paying for.
Yes, it was pretty grim last year but it's picking up nicely now thanks.
JonRBs profile said:
IT Consultant / C++ expert
Oops sorry chap
Me and my size 22’s again 
I didn’t mean to write of all C++ developers but there does seem to be a lot available at the moment. You’ve hit the nail on the head when you say good ones are sought after. Good people in any field are sought after the trouble is knowing which ones are the good ones from a CV and often a rather cursory interview. SO you usually end up going by word of mouth or finding out the hard way. >> Edited by t1grm on Monday 12th July 12:15
t1grm said:True, true.
Good people in any field are sought after the trouble is knowing which ones are the good ones from a CV and often a rather cursory interview.
The trick is to have a cracking (yet honest) CV with qualifications, plenty of experience and a strong list of big-name clients. Fortunately I have all these.
Still didn't stop me from being out of contract for several months last year though.
Contracting does indeed seem to be looking up, based on the contracts available in my very narrow and specialist field. I've seen long term forecasts which suggest we are at the bottom of a six year up cycle in IT demand - given the myriad pressures on IT expenditure over the last few years this doesn't seem unreasonable.
It always follows that contracting will flourish when demand outstrips supply, but this has to be netted off against the current corporare outsourcing culture. Go for too high a rate and watch the work fly overseas.
IR35; bit of a dead duck IMHO, with some contractors persuing the IR for tax overpaid under IR35. Of more concern must be 660a, and announcements in the last budget that seemed to herald even more oppressive taxation of contractors. Check the PCG for details.
Bottom line really must be: if you can earn enough contracting to pay PAYE (emploees AND employers) on the entire income, and still be ahead of where you would be as a permie, then its worth it. If you take any income as dividend then IR are going to be on your back and determined to get more tax out of you. Your decision whether you want to accepts the risk and hassle of proving you are outside of IR35.
Its up to you how much of an income premium you expect to compensate for increased mobility, lack of permie benefits (pension, health, training etc), and the hassle of working part time for the Inland Revenue and HM Customs. 5% of your gross according to IR35 - fair?
Bottom line is that whatever the government say, or prehaps even intend, they are doing their level best to make contracting unattractive in the UK. While market demand was poor, they were effectively killing contracting. As demand picks up the effects are less onerous, but they are still damaging IT in the UK by reducing its flexibility. IMHO.
For what its worth I have had an IR35 audit by IR and came out "not caught", but I'm not a typical contractor as most of my work is done offsite and is in dribs and drabs, with no client control. I am giving up IT after 25 years shortly to focus on something else ... I for one can't be bothered with it any more, even though prospects are fairly rosy and there is a respectable income to be made. Just not worth the hassle. The glory days have long gone.
It always follows that contracting will flourish when demand outstrips supply, but this has to be netted off against the current corporare outsourcing culture. Go for too high a rate and watch the work fly overseas.
IR35; bit of a dead duck IMHO, with some contractors persuing the IR for tax overpaid under IR35. Of more concern must be 660a, and announcements in the last budget that seemed to herald even more oppressive taxation of contractors. Check the PCG for details.
Bottom line really must be: if you can earn enough contracting to pay PAYE (emploees AND employers) on the entire income, and still be ahead of where you would be as a permie, then its worth it. If you take any income as dividend then IR are going to be on your back and determined to get more tax out of you. Your decision whether you want to accepts the risk and hassle of proving you are outside of IR35.
Its up to you how much of an income premium you expect to compensate for increased mobility, lack of permie benefits (pension, health, training etc), and the hassle of working part time for the Inland Revenue and HM Customs. 5% of your gross according to IR35 - fair?
Bottom line is that whatever the government say, or prehaps even intend, they are doing their level best to make contracting unattractive in the UK. While market demand was poor, they were effectively killing contracting. As demand picks up the effects are less onerous, but they are still damaging IT in the UK by reducing its flexibility. IMHO.
For what its worth I have had an IR35 audit by IR and came out "not caught", but I'm not a typical contractor as most of my work is done offsite and is in dribs and drabs, with no client control. I am giving up IT after 25 years shortly to focus on something else ... I for one can't be bothered with it any more, even though prospects are fairly rosy and there is a respectable income to be made. Just not worth the hassle. The glory days have long gone.
victormeldrew said:Indeed they have, unfortunately.
The glory days have long gone.
Gone are the days of billing £50 + VAT per hour and being in contract for the whole year. Damn, I miss that.
I'm sure I could have done even better than that if I'd been in the right place at the right time, but that was the highest I ever managed to bill.
Trouble is, I just can't bring myself to go back to being some employer's biatch so I'm going to stick with it for now. Depends on how much of this year I'm in contract.
So far all my contracts have been outside IR35, but then again I haven't yet had that tested. I do have various insurance policies that should help should I have to fight it all the way - and I will. I'm one of those contractors who refuse to lube up and take it up the schincter from Gordon and his cronies.
So I guess the bottom line is that I'm sticking with it out of sheer bloodymindedness and wouldn't recommend anyone to get into contracting at the moment. As victormeldrew says, it's probably not worth the hassle at present.
JonRB said:Sensible! After 15 years of contracting I tried the wage slave route ... twice ... best I endured was 6 months. Its just SOO difficult working for someone who knows less about less than you, and picking up a monthly salary slip with numbers that compare badly to your best week as a contractor. Double whammy.
Trouble is, I just can't bring myself to go back to being some employer's biatch so I'm going to stick with it for now.
Funnily, my best rate was exactly £50 + VAT / hour! Not for a whole year though.
I've just come out of a four month conrtact where I was essentially an employee, albeit a very highly paid one. After six years of freelance consultancy and paperwork it was a joy to let someone else do all the paperwork.
I'm just about to (fingers crossed) step into a six month contract where I'll be back to the invoicing game. Can't see how I can avoid getting nabbed by IR35, so I'm going to opt for an easy life and cough the cash and avoid divvies entirely. Still win given the rate, so what the hey.
Fully agree that the govt. seems to be doing its level best to stifle any enterprising spirit that may still exist here. Bastards.
I'm just about to (fingers crossed) step into a six month contract where I'll be back to the invoicing game. Can't see how I can avoid getting nabbed by IR35, so I'm going to opt for an easy life and cough the cash and avoid divvies entirely. Still win given the rate, so what the hey.
Fully agree that the govt. seems to be doing its level best to stifle any enterprising spirit that may still exist here. Bastards.
Marshy said:Surely this just encourages the IR? If we all roll over and cough up then surely they've won and we'll never get rid of this poxy legislation?
Can't see how I can avoid getting nabbed by IR35, so I'm going to opt for an easy life and cough the cash and avoid divvies entirely.
Gassing Station | Computers, Gadgets & Stuff | Top of Page | What's New | My Stuff