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Becoming a contractor programmer in the UK

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Re: Becoming a contractor programmer in the UK

#81

Post by 10dpd »

jackgavigan wrote: post #4

> The fixed rate VAT does not let you reclaim VAT, but you pay a lower rate than you charge your clients. So if you're a developer contractor you'll be adding 20% VAT to your client invoices, but only pay 14.5% to HMRC, keeping the remaining 5.5% to the business. This is not correct. The way the flat rate VAT scheme works is you add VAT to your bill, then pay 14.5% of your "flat rate turnover" to HMRC. Flat rate turn…

Also in your first year you receive an extra 1% - if you would normally pay 14.5%, in the first year you would only pay 13.5% back.

Re: Becoming a contractor programmer in the UK

#82

Post by martinald »

Do not ever be a sole trader. It means you are personally liable for anything that goes wrong.

Say you end up with a dreadful contract and everything goes wrong and the client sues. If you're a ltd company you can dissolve the business and pay them out of whatever assets your company has.

If you're a sole trader you're liable for all the costs. Until you're personally bankrupt. Sure, there may be clauses in the contract etc, but if someone is mean enough they can make your life very difficult and they will exploit the fact you are a sole trader.

Re: Becoming a contractor programmer in the UK

#83

Post by wumbernang »

monkeyprojects wrote: post #68
wumbernang wrote: post #20

Earlier quoted context omitted.

They do all the annoying paperwork for you at the registration service like the initial transfer of directors capital and appointments and crap like that. It's worth it. (I've killed 5 limited companies now so I have lots of experience ;-) IR35 is the only PITA IMHO of doing all this and that's easily sorted by doing the odd phone/laptop repair at the same time and invoicing it.

No it won't.. IR35 is explicitly contract by contract based... In theory (and in practice) you could be working at 3 places at the same time and 2 of them would be outside IR35 and 1 would be inside it... There are a lot of old wives tales and myths around IR35 http://www.contractoruk.com/ir35/top_ten_ir35_myths_debunked... shows a few of them. And sorry for posting links to the same two sites but that is where the r…

You're right and I glossed over most of it but the killers are concurrency, substitution and fixed deliverables. With concurrency, if you can prove that during the contracted period you had billable work outside the contract then that goes in your favour if you get nabbed and the contract is borderline. With substitution, the contract should state that you can provide a substitute on demand so you're contracting out services and yourself. The third is fixed deliverables; that's always a killer. Rolling contracts as non distinct labour are how to get shot.

For ref I had a small battle on this front and concurrency won it for me.

TBH get a good solicitor and get them to take a look at the contract paperwork. That's better advice :)

Re: Becoming a contractor programmer in the UK

#85

Post by 10dpd »

monkeyprojects wrote: post #49

As a contractor of many years standing (I started contracting when the internet appeared in 1994) I started reading the article hoping it was correct and finished it with my fingers covering my eyes in fear. Sadly I don't have time to correct many of the misconceptions and total inaccuracies it contains. Its a shame really as good articles are hard to find and I'm sure many americans would find the differences betwee…

I agree please be careful with the advice contained here, from my perspective:

- DO NOT give up your full time salaried position until you have at least one contract lined up.

- Use a separate bank account for your business and don't mix personal and business.

- You shouldn't manipulate your company to avoid the 'risk of getting caught by IR35', this is a regulation that is in place for a reason.

It seems this article has been written as a way to maximise income from affiliates - there are multiple sites in the UK that offer accountancy as a service.

Re: Becoming a contractor programmer in the UK

#86

Post by amouat »

monkeyprojects wrote: post #80
amouat wrote: post #74

Earlier quoted context omitted.

It would be a lot more useful if said what these misconceptions and inaccuracies were. It seemed generally accurate to me. I think you should either back up this comment or delete it; otherwise it's unfair to the author. (I don't mind to sound snarky here; the rest of your comment is genuinely helpful).

Where to begin Am I ready - The biggest bit is actually having the confidence to do it and a CV good that will get you past both the gatekeeper (the agent) and the client checking CVs... That means you should have real experience across both multiple employers and multiple market sectors (retail, consultancy, banking for instance) before thinking about it. Timing - Never understood this one. Projects have different l…

Thanks. That's appreciated. Hopefully the author will update the article.

Re: Becoming a contractor programmer in the UK

#87

Post by amouat »

gadders wrote: post #30
gadders wrote: post #6

I'd also mention joining IPSE ( http://www.ipse.co.uk/ ) which a is trade organisation for freelancers. They provide various benefits including IR35 insurance that covers investigations. Freeagent is a good online accounts package as well, but you need to find an accountant that uses it.

One other thing I would say is that I'm not sure your points about IR35 are correct. EG: * Don't use equipment provided by the client; -- This would be very hard to do. Most clients I've ever worked for supply you with a PC to use and won't allow non-corporate devices on their network. * Be careful with paid-for meals or participating in company parties. -- Never heard this mentioned before. * Avoid working for one c…

I've heard all those points mentioned, including by an accountant. Remember it is a points based system, not hard and fast rules.

Agree about scare stories, but it is a scary topic.

Re: Becoming a contractor programmer in the UK

#88

Post by mattmanser »

10dpd wrote: post #85
monkeyprojects wrote: post #49

As a contractor of many years standing (I started contracting when the internet appeared in 1994) I started reading the article hoping it was correct and finished it with my fingers covering my eyes in fear. Sadly I don't have time to correct many of the misconceptions and total inaccuracies it contains. Its a shame really as good articles are hard to find and I'm sure many americans would find the differences betwee…

I agree please be careful with the advice contained here, from my perspective: - DO NOT give up your full time salaried position until you have at least one contract lined up. - Use a separate bank account for your business and don't mix personal and business. - You shouldn't manipulate your company to avoid the 'risk of getting caught by IR35', this is a regulation that is in place for a reason. It seems this articl…

Strange advice, employment contracts in the UK generally have a minimum of 4 weeks notice, while contracts tend to require you to start in a week or so.

Re: Becoming a contractor programmer in the UK

#89

Post by mattmanser »

ommunist wrote: post #33
Nursie wrote: post #13

Why bother with a third party company registration service? You can do it yourself pretty easily through companies house. Do companiesmadesimple have any value-add? While I do share your cynicism about recruiters, I have also got most of my contracts through them. There are bad recruiters (vague job descriptions, never call you back) and there are good ones (We need someone here, you fit the bill, can we arrange a ti…

/Nursie - companies that provide registration services save time. If you have time, you can diy registration, right. But generally they provide very convenient service. Besides, services like 9-10 Adam Street can also provide you conference rooms, club place etc., in addition to registration. There are many companies that will help you open Ltd in the UK fast, and very few that will help you to close the once opened…

It literally takes 10 minutes to register a company yourself now, your advice is about 8 years out to date.

Re: Becoming a contractor programmer in the UK

#90

Post by mattmanser »

medwezys wrote: post #24
Nursie wrote: post #13

Why bother with a third party company registration service? You can do it yourself pretty easily through companies house. Do companiesmadesimple have any value-add? While I do share your cynicism about recruiters, I have also got most of my contracts through them. There are bad recruiters (vague job descriptions, never call you back) and there are good ones (We need someone here, you fit the bill, can we arrange a ti…

I mostly went with them because of their privacy package. They do simplify the process a little bit by putting a nice UI on top of this more manual process [1]. I'd rather pay a few extra pounds than risk submitting wrong information thus creating more trouble further down the road. Perhaps, FUD was playing a role too. [1] - https://www.gov.uk/limited-company-formation/overview

The UI in the formation companies is often worse and asks exactly the same questions.
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