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Becoming a contractor programmer in the UK

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Re: Becoming a contractor programmer in the UK

#91

Post by kaolinite »

I recently started working as a contractor (just for a few months to bring some cash in so I can continue to work on my business).

As I have a business already, I was considering doing the contracting under the business to reduce liability. Does anyone know whether this will increase the amount of tax I have to pay? I figured that I would have to pay corporation tax on any money I bring into the company as well as personal tax on any money that I pay myself as a salary. Is that the case?

Re: Becoming a contractor programmer in the UK

#92

Post by cpncrunch »

mattmanser wrote: post #88
10dpd wrote: post #85

Earlier quoted context omitted.

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.

It depends on the contract. My first contract allowed me to give my notice to my permanent job (pretty sure it was 4 weeks IIRC). I'm pretty sure some of my other contracts didn't start immediately -- it depends on the job. Also, if you have somewhat specialized skills they might be prepared to wait for you.

It's definitely a high risk strategy to quit your job before you've found a contract.

Re: Becoming a contractor programmer in the UK

#93

Post by bencollier49 »

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…

Re. IR35 investigations - that number is going to go up. The new intermediaries legislation will give HMRC a ready-made list of likely targets. I expect the first people to be hit will be in companies with a large number of contractors supplied through the same company.

Re: Becoming a contractor programmer in the UK

#94

Post by dublinclontarf »

martinald wrote: post #82

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 contr…

This is what business indemnity insurance is for, get covered to a minimum of £50K.

If you don't own a house and are brining in less than £70K PA it may or may not be worth registering a Limited company.

Re: Becoming a contractor programmer in the UK

#95

Post by fractallyte »

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…

> agencies have been legally barred from employing people as self employed since the 1970s

Do you happen to have a source for this?

The reason I ask is that I've written to HMRC regarding this precise issue, since I haven't been able to find any official statement to that effect.

While there are structural differences between a 'sole trader' (ie. self employed) and a 'limited company', it's up to the contractor to decide which is more suitable for them. I can't see that the client/agency has any say in the matter.

Re: Becoming a contractor programmer in the UK

#96

Post by jimduk »

boothead wrote: post #22
rossriley wrote: post #10

In terms of the recruiters section, whilst I appreciate you may not have had a good experience, this is probably the way a lot of people get contracting work, at least until you have a fairly big network of contacts. I'd be more interested in knowing what agencies do have a good reputation / good developer experience along with the note to beware of the cowboys.

In general the big ones suck and have a boiler room mentality. Good ones in my experience: Oxford Knight Functional Works GQR Hays (They're big but have been good to work with) I'll add more as I think of them. If you're looking for work in finance - you will almost certainly be going through a recruiter.

I did a quick review of agencies 2 yrs back to use as we started to run out of organic references in London - Oxford Knight, Burns Sheehan, Recworks (Java and grads) seemed decent. Stack Overflow is also worth using carefully

Re: Becoming a contractor programmer in the UK

#97

Post by stefek99 »

I would all the formalities after landing the first contract.

It takes like 15 minutes online to establish limited company.

And when you buy insurance - how do you know which one? My current contract requires me to have 10 million employer liability insurance (I don't hire anyone) but I have to have it anyway.

I guess I'll add some comments in this thread... (if time allows)

Re: Becoming a contractor programmer in the UK

#98

Post by stefek99 »

ForHackernews wrote: post #71

I've heard that in the UK, it's much more advantageous to work as a contractor than a full-time employee. Is there any truth to that? What advice would HN offer to a US-based developer looking to move to the UK?

I'm in the UK for 4.5 years and one of my biggest dreams is move to the US...

Main advantage of being contractor? Much better pay... They say - "no job security" - but there is no such term anyway.

Re: Becoming a contractor programmer in the UK

#99

Post by tkyjonathan »

You guys need to learn some accounting. Don't be afraid of book-keeping and be keen on any rule that helps you save on taxes. Overall, a limited company can save you around 20% on taxes over a salaried worker. That alone makes it difficult to go back to full-time employment.

Re: Becoming a contractor programmer in the UK

#100

Post by pkaler »

tkyjonathan wrote: post #99

You guys need to learn some accounting. Don't be afraid of book-keeping and be keen on any rule that helps you save on taxes. Overall, a limited company can save you around 20% on taxes over a salaried worker. That alone makes it difficult to go back to full-time employment.

I agree with you in principle, but not in practice.

Outsource your bookkeeping to Xero or Bench or wherever. As a consultant, accounting is a cost centre. You should be focusing on sales, marketing, or service delivery.

As a consultant, you are now a business. Ring the freaking bell or deliver service. That's your new job.

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