paul_y3k Posted February 15, 2006 Share Posted February 15, 2006 Anyone here an IT contractor or accountant who deals with IT contractors ? I'm about to take the plunge and need all the adivce I can get. cheers Paul Link to comment Share on other sites More sharing options...
UltraFlynn Posted February 15, 2006 Share Posted February 15, 2006 I'm an IT Contractor. Have been for almost 10 years now, working at several investment banks in the City and Docklands. What's the question? Link to comment Share on other sites More sharing options...
Supra_Nish Posted February 15, 2006 Share Posted February 15, 2006 Me too, any specific questions? Link to comment Share on other sites More sharing options...
paul_y3k Posted February 15, 2006 Author Share Posted February 15, 2006 I guess the simplest is, if there are any resources that give a good guide to setting up. I'm having part conversations with people and getting mixed / fragmented advice. I know i' going to need to set up a company, and sort out paying myself, but after the actual going about it is a bit of a blank page. For one thing how do I find a good accountant ? and also I remember reading a few years back in computing etc about the looming IR35 ? which seemed to imply contracting was going to be sevely hit on taxes ? Link to comment Share on other sites More sharing options...
UltraFlynn Posted February 15, 2006 Share Posted February 15, 2006 You can but you don't have to set up a limited company. That's a lot of hassle and not very tax efficient. But lots of people still do it. You have several choices if you don't want to run a limited company but the easiest is just to find an umbrella company (type "umbrella company" into Google and you'll get loads of hits) to work through. They sort everything out for you and predict a "retention ratio" which indicates how much of your hard-earned you get to keep. IR35 is a pain and means that you cannot take dividends out of your limited company. (You'd do this because you don't pay NI on dividends. And remember that you pay NI twice, employees and employers, both add up to 20%) Some contracts are IR35 friendly but that's no guarantee that the Inland Revenue will see it that way. Good places to start looking for info are http://www.pcg.org.uk and http://www.contractoruk.com/ Link to comment Share on other sites More sharing options...
Homer Posted February 15, 2006 Share Posted February 15, 2006 Contractor here too Be careful though, if you fall inside IR35 you need to be making a decent amount of money to make it worthwhile. My take home dropped from 40k to 25k after IR35. Some people take the chance with IR35 and continue to take dividends, most I know have gotten away with it for some time... Link to comment Share on other sites More sharing options...
paul_y3k Posted February 16, 2006 Author Share Posted February 16, 2006 cheers guys. now dooo i take that massive step ? lol Link to comment Share on other sites More sharing options...
UltraFlynn Posted February 16, 2006 Share Posted February 16, 2006 Of course you do. It pays more and you don't have to worry about bonuses, pay-rises and climbing the management greasy pole. Link to comment Share on other sites More sharing options...
Supra_Nish Posted February 16, 2006 Share Posted February 16, 2006 I'm umbrella, take home 84% of earnings. Not sure anyone with a limited company setup is able to beat that. I would realistically only consider contracting if you can make well over 50k, otherwise perhaps not worth the hassle. PM me if you'd like details on who i go through, but they only deal with earnings over 85k. Link to comment Share on other sites More sharing options...
UltraFlynn Posted February 16, 2006 Share Posted February 16, 2006 Limited company would get you between 55% and 60%. 84% is outstanding. Link to comment Share on other sites More sharing options...
Nick Posted February 16, 2006 Share Posted February 16, 2006 I was offered a contract back in the UK a couple of weeks ago and was told I could get around 80% retention, providing I was working away from home. I.e. they can submit expenses for digs and travel. You have to be careful because some umbrella companies offer you a great retention but don't tell you at the off that the only way you can achieve this is through huge expenses. Some require receipts; some push as far as they can (whilst still remaining legal) and play with the figures. Contracting in the UK isn't what it used to be, the government really f&*ked things up with IR35 and a lot of people have left the country as a result. They're deliberately keeping things vague. Link to comment Share on other sites More sharing options...
Supra_Nish Posted February 16, 2006 Share Posted February 16, 2006 No expense receipts here, they are based in Guernsey however if you get my drift... Link to comment Share on other sites More sharing options...
paul_y3k Posted February 16, 2006 Author Share Posted February 16, 2006 Thanks guys. I know the rate I'm being offered, so I guess next step is too look at the rention figure then. Have to do that tonight when I'm not at work. Link to comment Share on other sites More sharing options...
Ark Posted February 16, 2006 Share Posted February 16, 2006 Of course you do. It pays more and you don't have to worry about bonuses, pay-rises and climbing the management greasy pole. Agreed - best thing I ever did, work-wise. As a permie, you just know where that greasy pole will go if you slip up! As a contractor, everyone understands that you're there to do a job, take your money and go - you're the ultimate professional, which means no ass-kissing or political meandering. Just remember not to speak out of turn! Link to comment Share on other sites More sharing options...
Nick Posted February 16, 2006 Share Posted February 16, 2006 Are they VAT registered in the UK? As a UK citizen you can work for a foreign company in the UK 'on assignment' and not pay UK tax and NI, providing you're not there too long to raise eyebrows and aren't UK resident. To be legal you have to pay tax somewhere and a good company will know how to maximise your income while keeping you legal. I'd have a very, very hard time going back to a perm job and all the bullshit that comes with it. Link to comment Share on other sites More sharing options...
paul_y3k Posted February 16, 2006 Author Share Posted February 16, 2006 being doming some retntion calculations thanks to the links you've all provided and what at firsts seems a great amount of cash has suddenly dwindled to not much more than I'm no now ! although one calulater gives me 1000 more than the other ! even more confused now ! Link to comment Share on other sites More sharing options...
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