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Becoming a contractor programmer in the UK

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Re: Becoming a contractor programmer in the UK

#41

Post by andy_ppp »

One important thing to note is that your accountant gets a kickback from setting up a bank account. You should instead aim to search for the best bank account you can find with the best deal and the faster payments service; my bank account with Cater Allen still does not support this for example.

I'd also highly highly recommend freeagent which is so good it makes you wonder what your accountant does. It has been right where my accountant has often been wrong!! Here's a referral link:

http://fre.ag/34atijdc

Re: Becoming a contractor programmer in the UK

#43

Post by gadders »

dspillett wrote: post #20
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…

> 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.

They are usually negotiable, though.

Re: Becoming a contractor programmer in the UK

#44

Post by mattgibson »

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…

I wasn't aware of this. Do you happen to know which law/act/whatever covers it? Would have come in handy a few weeks ago when I was trying to negotiate my way out of a 3 month notice period.

Re: Becoming a contractor programmer in the UK

#45

Post by colinramsay »

peteretep wrote: post #38
colinramsay wrote: post #17

This is the easy bit. Finding quality, well paid work, that's the hard bit. It renders all the rest of it a bit irrelevant.

My experience (and that of many coworkers I've had) - unless you've really pissed in the pool, there is an unending supply of good contracts in London.

Perhaps true but:

- Are any remote? I mean who wants to live in London? ;)

- How do you find them in the first place?

Re: Becoming a contractor programmer in the UK

#46

Post by charlesdm »

kozhevnikov wrote: post #26
majc2 wrote: post #14

Earlier quoted context omitted.

It depends on what your strategy is and the specifics of your situation. http://www.contractoruk.com/money/ifas_guide_avoiding_new_di... has a generic guide about the new dividend tax. IMHO, just get an accountant.

I have a popular one, and they are rubbish. I'm on my first contract and I have no idea what I'm doing tax-wise. After £10.6k in salary they say one could take £28.5k in dividends before higher tax kicks in. So what do people do with the rest? Accept hight tax or leave it in business bank account and wait for next tax year?

Not all accountants know a lot about tax. Tax lawyers will be better at reducing your tax rate, though they can be expensive (and unnecessary for basic stuff).

The general 'rule' is you tend to only take out as much as you need. It's usually smart to always use the lower rate tax bands and then decide what to do with the excess that is left in the company.

However, since they're increasing the tax rate, now might be good time to take out a higher dividend, since you'll pay more to take it out next year. If (tax now take it out. :-) Unless you're wealthy enough to never have to declare dividends again, you'll want to take out more this year.

Also, don't forget to expense as much as you legally can. That's all tax deductible BEFORE corporate tax.

What can you do with the rest?

a. Invest it (compound interest: shares/bonds/property/etc)

b. Give yourself a loan from the company. You'll have to pay interest, but it's a relatively low rate (3.25% p/a I believe).

Wealthy people tend to be (relatively) poor in their personal name, but own a lot of stuff through companies - e.g. planes, boats, property.

Re: Becoming a contractor programmer in the UK

#47

Post by tome »

andy_ppp wrote: post #41

One important thing to note is that your accountant gets a kickback from setting up a bank account. You should instead aim to search for the best bank account you can find with the best deal and the faster payments service; my bank account with Cater Allen still does not support this for example. I'd also highly highly recommend freeagent which is so good it makes you wonder what your accountant does. It has been rig…

Freeagent looks interesting. What's their customer support like? My accountant is about 90 GBP per month but I get extremely prompt responses from them on technical issues so I'm inclined to think they're worth it.

Re: Becoming a contractor programmer in the UK

#48

Post by gadders »

yetanotheracc wrote: post #42

Compared to full-time positions of equivalent scope, what skill level and experience is needed to work as a contractor? How do the working conditions differ?

My experience is specific to banking, but interms of working conditions they are more or less identical, apart from the odd "contractor furlough" when contractors are forced to take unpaid leave (normally around the Christmas perioid).

Re: Becoming a contractor programmer in the UK

#49

Post by mostlystatic »

yetanotheracc wrote: post #30

What are the benefits of incorporating an Ltd vs being a sole trader?

In addition to the benefits you get as the contractor, agencies also don't want to hire sole traders as it could be argued they are actually employees. This would mean it's the agency's responsibility to withhold taxes, and the contractor would have rights to things like holiday and sick pay.

Re: Becoming a contractor programmer in the UK

#50

Post by gutnor »

dspillett wrote: post #20
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…

> 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.

In London, I'm currently on a 2 month notice, however that has always seemed unusual to agents and people I interviewed with. Also, that's a fixed period for senior and junior position - in other companies I worked for, there was always a special clause like "4 weeks + 1 week/year after the Xth year, capped at Y weeks"

That must be very dependent on your company sector and market. Also, notice is generally reciprocal, so a bigger one is generally considered a benefit - as practically, the company has to pay you when they terminate you, but you can almost always negotiate a much shorter notice when you resign.

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