Viewing 12 posts - 1 through 12 (of 12 total)
  • Contractors – Must Haves?
  • DaveyBoyWonder
    Free Member

    Afternoon all. I’m on the verge of entering the world of the mercenary IT contractor and wondered if anyone could give me some pointers into what’s needed? Going to be setting up a ltd company so business bank account and an accountant I know I need. What else? Any good online guides around claiming expenses etc? Totally new to it all after working as a perm for 20 years… Cheers, Dave

    mikewsmith
    Free Member

    Proper contractor?

    Some cards, website to advertise your services, your own laptop and software 😉

    yiman
    Free Member

    A lesson learned from me….when you take money out, don’t forget to set aside what you will owe in tax, otherwise you’ll get a surprise come end of year and have to take more money out to pay what you should have set aside…therefore will pay more tax on that.

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    mikewsmith
    Free Member

    Good point, if the money is good put 50% away every time you get paid, that is your tax and holiday/sick pay

    drnosh
    Free Member

    No 1. A plan.

    Who are your likely customers? How are you going to attract those customers? Why should they give you an order, or in other words, what is your USP?

    Do you have the tools to do the job?

    Latest PC and softwares?

    You will really be on your own.

    Do you have the tenacity, determination, focus, not get distracted easily (its too easy to get up late, have breakfast, watch a bit of tv if you work at home).

    What happens if it takes > 6 months to earn any income. Can you finance that?

    Fail to plan = Plan to fail

    I’ve been self employed for 18 years and I’m still asking myself these kinds of questions.

    scrumfled
    Free Member

    Some good guides at contractoruk.com

    Dont forget professional liability insurance

    Quickbooks is handy for invoicing on the go

    Starling bank will have you up and running in minutes

    Everything else depends on what you’re doing.

    deadkenny
    Free Member

    Aim for 3 months at least in the company bank to cover being on the bench while still paying self a regular salary. Will take a while to build up funds to this. Plus always have enough to cover corp tax.

    May or may not benefit from being VAT registered. Some clients prefer or require VAT registered companies. Small enough turnover you can use flat rate VAT and might benefit from that, though less so these days financially, but it still is a benefit from being less hassle.

    Check out IPSE, maybe consider Plus membership as it gives you various insurances on the contract side, clients going bust, illness, jury service & tax investigation cover.

    Decent freelance specialist accountant and they might have handy guides.

    And depending on the work, you may need to get Professional Indemnity and Public/Employers Liability insurances. Prof indemnity maybe the key one in case your company gets sued by the client if things screw up. Liability stuff covers you causing damage/injury etc, e.g. you burn the client’s office down by accident. Clients may require this.

    Personally, in the IT world, I’d try to get direct contracts and use your own IR35 friendly contracts (IPSE and others have templates). Use contacts, friends, former employers or colleagues. But if you’re stuck then agents it will be, but they are looking after themselves first and some are really terrible. I find there’s a fight to get a decent contract on your terms going that route.

    mariner
    Free Member

    This is going back a few years but seen it done:

    A flash super car company car

    All new double glazing.

    New patio

    Cruise booked

    Contract ended.

    If you do one thing get a good Accountant and I mean good not a cheap book keeper or a computerised system.

    frankconway
    Full Member

    DrNosh and DeadKenny have told you pretty much all you need to know. I cannot overstate the important of a good accountant – they will help you use the law to your best advantage.

    Always look to the next contract and plan for (extended) gaps between assignments. Build a strong network of contacts – and use them; use them – as in, get as much as you can out of them without giving much in return or compromising your position

    In the IT space can you (effectively and efficiently) work from home or do you hope your assignments will be embedded with the client or do you need an office away from home?

    IR 35 is a consideration as HMRC have focussed their investigative efforts in the self-employed sector on IT as it’s perceived to be a soft target so how do you differentiate between being an employee and truly self-employed? Just saying you’re self-employed doesn’t work; you must be able to prove it from a legal perspective. Be aware of lengthy contracts – they sound great but strengthen HMRC’s argument that you are a de facto employee; in lengthy assignments agree a ‘structured break’ – but not a holiday – with client.

    Comments based on 20+years in self-employed sector; recently returned to perm; draw your own conclusions.

    Good luck!

    Caher
    Full Member

    Start a pension and save some 20% off your corporate tax.

    Andy_B
    Full Member

    Pay your VAT on time (if you go VAT registered). All other bills are negotiable regarding payment dates. It’s just just nicer to pay them before people have to chase you.

    deadkenny
    Free Member

    You can set up DD for VAT, and it adds a few more days to the payment date.

    You do have to file the return though on time.

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