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Becoming a contractor programmer in the UK

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Re: Becoming a contractor programmer in the UK

#71

Post by harel »

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…

In the 14 months you've had the company registered, have you had any dealing with Inland Revenue inquiring about your accounts or coming to check up on you? I'm asking because at my current work they were always coming to check since the business got its funding. There was no wrong doing of course, but it did waste a lot of everybody's time.

Re: Becoming a contractor programmer in the UK

#73

Post by andy_ppp »

tome wrote: post #47
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.

Freeagent have always responded pretty immediately but it's best to get an accountant [1] that supports Freeagent and you are then effectively paying for support. They use Get Satisfaction which is community and vendor run support [2].

It makes the accountants life a lot easier too (they get a slightly restricted login).

[1] http://www.freeagent.com/find-an-accountant

[2] http://community.freeagent.com/freeagent

Re: Becoming a contractor programmer in the UK

#74

Post by crdb »

CharlesFinley wrote: post #4

The old discussion is now closed. You should be aware that there is no obligation for limited companies to have a business bank account. However, it is usually a good idea to have one. Furthermore, you don't need to be a UK resident to open a business bank account but most banks will not deal with you due to higher costs and fraud concerns. P.S. your company does not require a UK-based bank account. You can open a bu…

I can speak only for Singapore, but banks here require very high deposits and minimum required balance if you are not a Singaporean company (at least when I asked, it was ~$50,000 - still better than UBS in Switzerland who wanted CHF 100,000 four years ago).

We're one half UK resident, one half not, and the UK bank put up the fraud check, which required about 30 pages of paperwork including three different proofs of ID copied and authenticated by a notary public (cost me $30). They were and are ultra slow and do not accept any form of internet communication - only snail mail, phone and in-person counter service.

Re: Becoming a contractor programmer in the UK

#75

Post by brc »

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…

Amazing that 15 years ago I was making more than 400 pd (contract was actually 45 ph, and you could push overtime if you wanted) and I was pretty junior at the time. And I was only paying 130 pw rent in Zone 2.

Ah, boom times. Don't you just love 'em, and miss 'em when they're gone?

edit : original post had a calculation mistake in it.

Re: Becoming a contractor programmer in the UK

#76

Post by Symbiote »

peteretep wrote: post #31
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.

That's been my experience when hiring people. I only hired one person with a 12 week notice, everyone else was 4 weeks. YMMV, I guess.

I have a 12-week notice period (UK government), as do most of my friends (mostly finance). We'd all started on 4 weeks as junior developers, but it had been increased with promotions.

Re: Becoming a contractor programmer in the UK

#77

Post by davedx »

brc wrote: post #75
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…

Amazing that 15 years ago I was making more than 400 pd (contract was actually 45 ph, and you could push overtime if you wanted) and I was pretty junior at the time. And I was only paying 130 pw rent in Zone 2. Ah, boom times. Don't you just love 'em, and miss 'em when they're gone? edit : original post had a calculation mistake in it.

The math suggests you were working 13 hour days? Are you sure that's correct?

Re: Becoming a contractor programmer in the UK

#78

Post by brc »

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?

In my experience, sometimes they wanted more skill and experience for a permanent role than they did for a contractor. I worked as a contractor and had to fill headcount, and the process was different for a contractor and a permanent. Contractors are much simpler to get rid of if they don't turn out, so hiring decisions were made faster. Permanent people being hired had to be of a higher standard.

This doesn't mean that you can get away with being a junior in a senior role, but it might mean there is more of a focus on technical skills rather than university qualifications, that type of thing.

There are some crap contractors floating about the system and some crap permanent employees. And vice versa.

The working conditions are almost identical, except that in a downturn the contractors will be first out the door. They also get to avoid 'company building' meetings and crap like that.

Re: Becoming a contractor programmer in the UK

#79

Post by michaelt »

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?

  I have a popular one, and they are rubbish.
Imagine you can sell small business accountancy services for £300 a year; and you can hire an accountant for £40,000 salary for a 2,000 hour year. Add on an extra £10,000 for tax, insurance, office space, parking, advertising, and things like that.

If you do an average of 6 hours of work for each client each year, your accountant can serve 333 customers and bring in £100000 a year, making £50,000 in profit.

On the other hand if you automate heavily and get rid of all the customers who have complex needs or who are calling you a lot, so you do an average of 15 minutes work for each client each year, the same accountant can serve 8,000 customers and bring in £2,400,000 a year making £2,350,000 in profit.

I know how I'd run my accountancy business, if I had one!

Re: Becoming a contractor programmer in the UK

#80

Post by brc »

ravibhatt wrote: post #57

Adding my two cents. I have been a contractor for almost 3 years now. My personal opinion: - Contracting pays a lot more than a perm role. - You do not deal with politics, which is a major plus for me. - You do not hear about you not getting your promised y% bonus because company did not do x% business. - You are not worried about 'changing the world', the way you would in a startup. - working 4-6 years your asses of…

Good list. I would also add:

- don't trust agents - don't trust agents One more thing: - don't trust agents

If you find a half-honest one work with them as much as you can. They'll still try and screw you over but they might decide to be straight once in a while.

I don't blame them in a way - the competition is fierce and matching client and contractor for happy outcomes is hard. But too many of them are willing to try and renegotiate your rate down after an offer is made - 'they like you, but not at your original rate' - 99/100 this is a ruse to keep some pounds in their pocket. Learn to be firm with agents.

Find out who makes the decisions on hiring and who has budget within a company and get to know them personally. They're the ones signing your pay.

I contracted for nearly 10 years in a variety of places. It's a great life but you do have to keep an eye on your career as your skill set might start to get old, and it's hard to move onto the next thing because you don't get the chance to practice it. But I have friends who have been doing it for 20 years now, and they have made a great life out of it.

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