Perm vs contract

[GSP]

What is actually involved with going contract, as I keep getting chased to provide consultancy or take contract jobs.

I normally turn them down 1) because I like the security of a well paid perm job, with the perks that come with it, 2) I've never wanted to take 3 month contracts.

I've now been offered a 2 year contract working 2 weeks on, 2 weeks off, with a €600 day rate.

The fact that it is a 2 year contract has made my ears prick up. But I have no idea what's involved with essentially working for your self.

Do I need to set up a ltd company? Get an accountant?

Is there places that can give proper guidance to people like me that have no idea where to start?

Thanks

[dcb]

GSP said:

Do I need to set up a ltd company? Get an accountant?

Is there places that can give proper guidance to people like me that have no idea where to start?

This has been discussed many times.

The search facility in PH is useful.

[zippy3x]

If you've decided to go contracting based on it being 2 years, let me pass on a little advice from a veteran contractor. I, and I'm sure most contractors, have learned the hard way that any contract is only as long as the notice period (and some clients even try to weasel out of that).
They could offer you a two hundred year contract with a two week notice period. That's a two week rolling contract.

[worsy]

zippy3x said:

If you've decided to go contracting based on it being 2 years, let me pass on a little advice from a veteran contractor. I, and I'm sure most contractors, have learned the hard way that any contract is only as long as the notice period (and some clients even try to weasel out of that).
They could offer you a two hundred year contract with a two week notice period. That's a two week rolling contract.

Amen!

Much prefer short (6 months) renewals myself, I always always finish a contract and so a shorter renewal gives both you and the client the option to go down another route if need be.

£600 a day is a good rate, you should be able to build up a good contingency fund quickly to take you through any lean times. Just don't do what many others do, take that net payment and splash out on private schools, pcp porsche and maxed up mortgage.

[robmlufc]

zippy3x said:

They could offer you a two hundred year contract with a two week notice period. That's a two week rolling contract.

This is probably the most important thing about contracting! A lot of people I have worked with on long term contracts get into their head that its like a permy job. Never forget your on a short notice period, keeps you on your toes at least.

Apart from that contracting is brilliant, best thing I ever did.

GSP said:

Do I need to set up a ltd company? Get an accountant?

Check out www.danbro.co.uk .Umbrella company is an easy way to go

Edited by robmlufc on Friday 13th July 10:37

[98elise]

As a recent convert I echo everything said above

[Carl_Docklands]

GSP said:

What is actually involved with going contract, as I keep getting chased to provide consultancy or take contract jobs.

I normally turn them down 1) because I like the security of a well paid perm job, with the perks that come with it, 2) I've never wanted to take 3 month contracts.

I've now been offered a 2 year contract working 2 weeks on, 2 weeks off, with a €600 day rate.

The fact that it is a 2 year contract has made my ears prick up. But I have no idea what's involved with essentially working for your self.

Do I need to set up a ltd company? Get an accountant?

Is there places that can give proper guidance to people like me that have no idea where to start?

Thanks

Seek some professional advice and don't rely 100% on forums as contracts vary as does the clients tax sensitivities.

The rate might be good but a fair whack of long term contracts like yours have additional tax issues to assess, you might end up having to pay more tax than a shorter engagement.

Certainly a 2 year contract can look like a disguised permie to HMRC which means using a tax efficient LTD is more challenging. In some cases you might have been better off going perm for 2 years instead.

I usually do 6 month rolling and I am locked into a project, once the project dies (6-24 months), my role dies and I move on. My role does not work as a permie as I am a specialist.

Oh and do not use an umbrella for long-term gigs like this.

Tread carefully and get clued up, I use SJD Accountancy, very approachable and professional. They have a good rep and can advise you better.

Edited by Carl_Docklands on Friday 13th July 22:24

[98elise]

Carl_Docklands said:

GSP said:

What is actually involved with going contract, as I keep getting chased to provide consultancy or take contract jobs.

I normally turn them down 1) because I like the security of a well paid perm job, with the perks that come with it, 2) I've never wanted to take 3 month contracts.

I've now been offered a 2 year contract working 2 weeks on, 2 weeks off, with a €600 day rate.

The fact that it is a 2 year contract has made my ears prick up. But I have no idea what's involved with essentially working for your self.

Do I need to set up a ltd company? Get an accountant?

Is there places that can give proper guidance to people like me that have no idea where to start?

Thanks

Seek some professional advice and don't rely 100% on forums as contracts vary as does the clients tax sensitivities.

The rate might be good but a fair whack of long term contracts like yours have additional tax issues to assess, you might end up having to pay more tax than a shorter engagement.

Certainly a 2 year contract can look like a disguised permie to HMRC which means using a tax efficient LTD is more challenging. In some cases you might have been better off going perm for 2 years instead.

I usually do 6 month rolling and I am locked into a project, once the project dies (6-24 months), my role dies and I move on. My role does not work as a permie as I am a specialist.

Oh and do not use an umbrella for long-term gigs like this.

Tread carefully and get clued up, I use SJD Accountancy, very approachable and professional. They have a good rep and can advise you better.

Edited by Carl_Docklands on Friday 13th July 22:24

I also use SJD, and they are very good.

[Olf]

Are you sure that's not 600 a day for the 2 weeks worked - i.e. average 300 a day? Check the fine print!!!

[Tim330]

Have a read thorugh the guides here. An alternative to SJD is Nixon Williams accountants, fees are comparable.

http://www.contractoruk.com/first_timers/

[MickC]

Olf said:

Are you sure that's not 600 a day for the 2 weeks worked - i.e. average 300 a day? Check the fine print!!!

Yep I read that as 600 per day but only half time, which is much less of a good rate unless you can fill the other 2 weeks with something. The other thing about 2 weeks on 2 off is that if for some reason you don't do one of those 2 weeks (sickness, holiday, etc), that can be 6 weeks without money comming in - make damn sure you have a good fighting fund saved in the company for that possibility.

Edited by MickC on Saturday 14th July 14:03