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Becoming a contractor programmer in the UK

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Re: Becoming a contractor programmer in the UK

#111

Post by ownagefool »

acaloiar wrote: post #89

As others have noted, the 4 months of living expenses requirement can be quite excessive. I've seen similar advice in the past and can't help but recall my personal anecdote of starting a company with barely enough money for one month of expenses. What is far more vital to one's success as a solo contractor is not having savings, but having guaranteed future revenue generation – clients with signed contracts. As the…

Generally a client can end your contract pretty much at any time without recourse. If you're client doesn't have mutability of obligation clause, that allows this irregardless of notice period, you probably fall under ir35.

So this advice is based on that, but obviously if you're good and marketable, you'll probably be OK. I myself really became a contractor after a relationship breakup when I was in about over £3000 O/D, a mortgage to pay and about £4300 credit limit.

Discussed this with agent, they agreed to pay me the day they were paid and I drove 400 miles for a contract which wasn't actually signed by the client yet. Luckily, they were happy to see me on the Monday, and I got paid at about £4200 into that limit.

This was 2 years ago. Now I probably earn 5+ times my highest perm salary, so in my case the gamble was super worth it, but if you're not somewhat charismatic and decent at your job with a marketable skill, it could go the other way.

Re: Becoming a contractor programmer in the UK

#112

Post by sklogic »

codeshaman wrote: post #82

Great article, very thoughtful. But my biggest question is where do you find a client ? Is there a website (like a jobs website) for contract work, besides elance and the like ? Yeah, I can google it, but it's usually just a waste of time. Is there any serious place where an experienced developer can meet serious clients ? I mean clients willing to pay for quality work so I can make a living similar to a corporate jo…

I do not know anyone who started as a contractor. Everyone I know (myself included) moved to contracting after maturing for several years in the industry, building up a reputation and a network of contacts.

Re: Becoming a contractor programmer in the UK

#113

Post by Damerell »

Can anybody rate the Headhunter family? They are aggressive and expensive. GB does'nt really suit as far as big companies are concerned because IBM experience is required which is lacking in GB Portfolios. Good luck to the Indians - I think they have got it right excluding German language.

Re: Becoming a contractor programmer in the UK

#114

Post by hackerboos »

tom-lord wrote: post #40
dspillett wrote: post #20

Earlier quoted context omitted.

> Most permanent jobs have a 4 week notice period Really? In experienced level dev jobs? Most of the people I know are on two months notice. Three months, which is what I'm tied to, doesn't seem uncommon for senior devs/DBAs/similar.

It's also worth noting that (at least in the UK) such notice periods are not legally binding. You can only be forced to give a notice period up to your payroll pay frequency. So for example, if you get paid monthly then you cannot be sued for failing to give > 1 month's notice! ... But of course, most people will still honour their company's "3 month notice" (or whatever) period out of good faith, as it's generally a…

>It's also worth noting that (at least in the UK) such notice periods are not legally binding.

Erm. Yes it is.

It's unlikely that your old employer would legally enforce a notice period. But they are entitled to sue for lost revenue.

There are standard periods depending on how long you have worked there but after a probational period, the contract lengths are legal.

http://www.thisismoney.co.uk/money/experts/article-2490277/D...

Re: Becoming a contractor programmer in the UK

#115

Post by logiclabs »

Despite me not generally being a fan of agencies, they do have there advantages. So long as they're reputable, one big advantage which not many people take into account is that a good one is giving you free invoice factoring and debt collection. This means you would normally get paid on-time even if the client hasn't paid the invoice yet. This is a pretty major thing for those starting out, particularly if you are touting for small clients, who may run into cash flow issues, or very large clients who mostly take forever to pay invoices.

Chasing clients for money is, particularly when starting out, something that you feel hesitant to do in case you adversely affect your relationship with the client, as you don't think you have much leverage and are risking a good contract. It's a confidence thing though, these days I'd have no problem putting my foot down and walking away from a non-paying customer's contract.

Of course, all you're really doing is moving the risk of non-payment on to the agency but, so far having worked with about 8 agencies, I've not had any trouble being paid on-time in 12 years. Working directly I've run into non-payment issues several times with non-payment periods upto almost a year (though I'd long moved on to another contract). But then I've got a friend who's been ripped-off by a recruitment agency, having folded with a couple of months pay due. So you do still need to chase them too and ensure you maintain an adequate pot of savings for breaks between contracts and covering non-payment issues.

Having been in the position of working directly for clients and being owed large amounts of money for long periods of time, I'd recommend finding a reputable (sic) recruitment agent until you are up and running for a good few months or even a couple of years. That all said, you do have to put up with the barrage of appalling sales pitches for unsuitable positions and a lack of technical knowledge while dealing with most of them.

Re: Becoming a contractor programmer in the UK

#116

Post by SmellyGeekBoy »

piotrp wrote: post #51
peteretep wrote: post #8

> You should have savings to cover at least 4 months of > your usual expenses. You will spend some money > establishing a company. It may take several weeks to > find your first contract. If you wanted to be extra safe, sure. I made the switch when I was heavily in debt, and it helped me get out of debt, so YMMV. > A service like www.formationsfactory.co.uk will make the > incorporation process easy. Actually it's su…

> For Central London, a developer should be asking for £300-£600/pd depending on seniority and what they're doing. That seems pretty low to me. Here in the Netherlands contract developers get about the same, between £400-£600/pd (actually between 70~90 euro/hour) but cost of living is way lower than in central London.

I'm in the Midlands and have no trouble finding work around the mid-high end of that range. Perhaps the streets of London aren't paved with gold after all. ;)

Re: Becoming a contractor programmer in the UK

#117

Post by calpaterson »

acaloiar wrote: post #89

As others have noted, the 4 months of living expenses requirement can be quite excessive. I've seen similar advice in the past and can't help but recall my personal anecdote of starting a company with barely enough money for one month of expenses. What is far more vital to one's success as a solo contractor is not having savings, but having guaranteed future revenue generation – clients with signed contracts. As the…

Signed contracts are not guaranteed future revenue generation! An accountant would not for example allow you to recognise it as revenue in your accounts. Clients can go bankrupt, they can be slow to pay, they can not pay, etc etc.

Calculating how much capital you need to have in reserve before you go contract can be done using a couple of basic probability/finance measures. Look at reasonable worst cases (client bankruptcy, tax investigation, unexpected dismissal) and make sure that you have the current assets to survive them!

But you're doing this as an employee right? (Right!?) I hope everyone on this forum is going to be ok if they are made redundant tomorrow.

The whole point of this is that you need to be able to survive a setback. You should not be living at a 10% chance of missing rent each month! You can count on that probability eventually happening over a long enough period.

Re: Becoming a contractor programmer in the UK

#118

Post by ownagefool »

jwmoz wrote: post #97
piotrp wrote: post #51

Earlier quoted context omitted.

> For Central London, a developer should be asking for £300-£600/pd depending on seniority and what they're doing. That seems pretty low to me. Here in the Netherlands contract developers get about the same, between £400-£600/pd (actually between 70~90 euro/hour) but cost of living is way lower than in central London.

Where do you go for your contact leads in NL? I know the London market well but find it hard to find any decent Euro contracts.

I'd like to know this too.

Re: Becoming a contractor programmer in the UK

#119

Post by SmellyGeekBoy »

hanoz wrote: post #86

Contrary to the advice, you do not need an accountant, especially if you are able to ignore another part of the advice and not register for VAT (if your turnover is below the registration threshold of £82,000) which simplifies the accounting greatly. Your duties are then mainly as follows: Use HMRC PAYE Tools to report each salary payment you make, and pay any National Insurance if applicable (which it won't be if yo…

Absolutely solid advice here. This is exactly what I do as a one man band.

Re: Becoming a contractor programmer in the UK

#120

Post by logiclabs »

peteretep wrote: post #67
nikon wrote: post #60

Earlier quoted context omitted.

7.5% on your dividends. About 3k a year for a 100k earner... Nothing to go permie about.

I had thought the jury was still out on this - I do hope it ends up being only that amount though.

The rates for dividend payments are set but because of the triple changes of the budget - dividends, employment allowance and travel/subsistence expenses, it could affect some contractors a lot worse than others. Though it's mostly those who rack up large commuting/accommodation expenses chasing high paid work in London while not living anywhere near there. The travel/subsistence rules haven't been set yet but it's likely HMRC will crack down on them quite hard.
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