IT Contracting

[reverend]

Are many of you folks in the contracting game?

I'm getting a bit pee'd off working in a permanent role doing ridiculous hours so fancying giving this a go - if I'm going to do the hours I may as well try and maximise my pay.

I worked at a large IT company (they do the Olympics currently) and they forced all contractors to do a professional day, i.e. you worked until you were finished but the place I'm at now they do a very stringent 7.5 hours although I'm guessing that isn't the norm.

I'm also fancying dipping into projects shorter term to build up more knowledge in certain areas - I'm certified in various Citrix products, I'm VCP-Cloud and quite fancying a new challenge! The current direction at the place I'm at now is to move a lot of workloads to Hyper-V, and after building up a great VMware cluster of 50+ hosts it's not really something I fancy, i.e. undoing lots of great work to move to a product that isn't as good purely to save a bit of cost (but spend more on management)

I know the market is pretty scary at the moment but in all honesty my full-time job is working for a company which is owned by venture capitalists so they can sell us off at any point in time when it suits them anyway!

[BertRoot]

Something I am not far off doing myself but have a different skillset. I would have a lookaround and hit some of the pimps who cover what you do, cloud and ESX are sought after skills to have in that game and I know a few at it though not seen them since my last project but one of the guys who was basically a VMWare god left to do a contract for North Shields Police on 900 a day which is nice. I have a lot of friends in the game currently but rates vary enormously from 350 to 1500 a day dependent on skills. If you are willing to travel you will do alright but remember to try and either negotiate in expenses or at least have an idea of what it will cost you to work away.

[reverend]

Like you say mate the rates really do vary wildly!

I'm currently waiting to see if this place is going to redo our SC clearance as they screwed up the transfer (and I'd like that back as it really does open doors to more lucrative contracts!)

What sort of stuff do you do mate?

[liveseytowers]

I've always said I'd try it if I got made redundant. We've got a couple at work who have been long term contracts doing infrastructure support and are typically generalists. Normal day rate is £300 but we get the odd contractors in who are McAfee experts who charge £1000 a day!

I'd be more than happy with £300 a day for doing general support.

Sent from my HTC One using Tapatalk

[BertRoot]

I do all sorts but currently transition and transformation from an architecture and technical standpoint. Qualified in TOGAF and a few other things on that side. Lots of cash out there but want to be near home for a while really. Currently having to work in Yorkshire which is painful but at least has for me a good insight into financial services IT and the regulation behind all the faff that goes on in their industry. Worked in government for a long time before that and am SC cleared.

[reverend]

I've been told TOGAF is worth investigating - I've been waiting on hearing on a job since Xmas (they keep asking have I heard from them so not sure whats going on - I'd written it off ages ago) and they wanted to send me on that course straight away!

You'd make a fortune contracting with those - I know a few guys working as architects down at Atos and their day rates are obscene!

[BertRoot]

TOGAF ain't all that. It's a multiple choice exam that can be done with a three day exam and a bit of reading. Industry seems to like it though. Experience in different industries is what counts though.

[_Belial]

I've never had a "permy" job, I went contracting straight out uni, that was about 18 years ago I never saw the appeal of permanent jobs, there's always contracts around so have never been out of work for more than a couple of weeks. My current contract I'm in my 5th renewal year now, my longest contract lasted 7 years! In the good old days we'd get paid hourly, so everyone was taking the pi55 and working silly hours, but these days that's rare, and everything's a daily rate. I'm a coder, so can't really comment on availability of work for techy support or network/vm style jobs, but finding a dev job is pretty easy going if you have the skills. I've worked for some very well known internationals, and worked all over the world, so I think it's a superb way to work.

Your choices then are if you do it through your own limited company or what a lot of us do now is use umbrella companies so they take care of all the tax/paperwork etc. There are of course a few questionable schemes around too to maximize your tax allowance, I know one mate who uses some offshore scheme and ends up paying something silly like 8% tax on an income over 220k pa!

If you've got the skills, confidence and your missus doesn't mind the apparent "insecurity" of not having a permy job then go for it, I've had a few permy offers from the people I work for over the years but tbh it never appealed (and they could never pay enough ), I'll be contracting into retirement

[reverend]

That's awesome thank-you mate, I was looking into the umbrella thing but for the time being I've submitted the paperwork to spin up a ltd company and will see what we can get from there.

I've got to admit even as quick as they close certain loopholes there seem to be new ones that the creative accountants keep finding. As long as the politicians pay themselves this way they will ensure there are loopholes out there to be taken advantage of!

Daft question but don't you have to take a break so that you don't get classed as a permanent employee in the eyes of HMRC? I have one friend who's been subcontracted out to the same place for several years now without a break and he says so far he's been ok, but I'm guessing maybe he's not taking advantage to high heaven?!

Like you say a guy I was working with reckons he'll be doing around 8% this year - it's crazy!

[_Belial]

Yes, if you stay somewhere more than 2 years you have to move, fortunately, you can easily (on paper) move to a diff address at big companies and different departments too It didn't used to be the way then the labour introduced something called IR35 which made everyone stop using limited companies and go Umbrella (which means I'm now treated as a permanent employee of my umbrella company, but still have to change address/depts every 2 years or I can't claim the same expenses).

If you go down the ltd route (I still have a ltd company but just use it for other stuff not my day to day work) just be sure to get a good accountant who'll explain what you can and can't do or you'll end up in a bit of a pickle.

[reverend]

Yeah I read IR35 causes nightmares! Accountant wise I've had someone put forward who's been doing a good job for other IT guys so fingers crossed - it's definitely a learning curve though!

Initially I'm not going to open a bank account and leave the company as dormant while I scope things out, just to make the filing easier in the short term as the company wouldn't be earning anything, although another guy I work with (permy) has kept his ltd company running for years and runs things through the expenses. I can only assume he does some work on the side so that he has cash-flow in there?!

[akimba]

Yes, if you stay somewhere more than 2 years you have to move, fortunately, you can easily (on paper) move to a diff address at big companies and different departments too It didn't used to be the way then the labour introduced something called IR35 which made everyone stop using limited companies and go Umbrella (which means I'm now treated as a permanent employee of my umbrella company, but still have to change address/depts every 2 years or I can't claim the same expenses).

If you go down the ltd route (I still have a ltd company but just use it for other stuff not my day to day work) just be sure to get a good accountant who'll explain what you can and can't do or you'll end up in a bit of a pickle.

How much do you pay the umbrella company as I got told a lot of people can get stung by these and why I would prefer a LTD company. I am in full time work but have been thinking of Contracting as I don't have a Mortgage or anything to really worry about but I know I can earn a lot more contracting. I am a Software Dev so I do see lots of contracts floating about in my area which seem to be quite lucrative but as an example if I earned say £500 a day how much after Tax/NI and Umbrella contribution how much would I take home of that?

[macmilm]

I just found an accountant that curve balled the IR35 and I still kept my limited company. Not sure how?? That was there job and I didnt care.
They also guaranteed if you did get stung IR35 wise there was a pot that would pay out your losses..

Never had any bother though.

Will try dig up name of company that I went through.

[_Belial]

How much do you pay the umbrella company as I got told a lot of people can get stung by these and why I would prefer a LTD company. I am in full time work but have been thinking of Contracting as I don't have a Mortgage or anything to really worry about but I know I can earn a lot more contracting. I am a Software Dev so I do see lots of contracts floating about in my area which seem to be quite lucrative but as an example if I earned say £500 a day how much after Tax/NI and Umbrella contribution how much would I take home of that?

I've been with them for years now so I'm down to 2%, as for how much you'd take home, it depends entirely on the umbrella tbh and how much you claim in expenses Also a lot of the umbrella's set aside a sum each month from your money into a holiday/sickness fund, but i don't think it'd be unrealistic for you to expect to bring home about 7k after tax each month at 500pd.

[akimba]

I've been with them for years now so I'm down to 2%, as for how much you'd take home, it depends entirely on the umbrella tbh and how much you claim in expenses Also a lot of the umbrella's set aside a sum each month from your money into a holiday/sickness fund, but i don't think it'd be unrealistic for you to expect to bring home about 7k after tax each month at 500pd.

Yeah I be claiming everything poss ;-) So you are looking at a 30% deduction which would cover everything inc hols etc that's pretty good ;-)

[BertRoot]

Knew belial would pop up. Good summary young man.

[hxbro]

I contract though my own ltd company, pay myself a "directors salary" which takes me to NI threshold, then dividends on top. Tax 20% corporation tax, then either 10 or 20% on dividends over 40k or whatever the limit is (or the rate come to think of it).

Claim as many expenses as possible to reduce tax - things like mobile phone, travel to work, food at work, home office, etc . I'm flat vat registered (you keep a portion of the vat you collect) which is free money for nothing

Helps to have a good account and some sort of online system to manage your accounts, I use crunch.co.uk it's flat fee so I know what my costs are.

Umbrella's tend to cost you more, so wouldn't bother with them.

You can make a lot of money contracting, good luck

[reverend]

At the moment being PAYE really does seem to make a mug of you - it's going to be interesting how things go! I got confirmation that the ltd company has been incorporated at lunch and can now start to do all the prep work

[Chubbs]

I've worked with contractors but don't have the balls/skils to ever take the plunge.

Somebody I worked with went contracting, great guy, great developer - he's never looked back.

All the best to you, if you've got this far you've done the hardest bit!

[AP0ll0UK]

I'm currently on my second contract which is now into it's third extension.

My background is Tech Support, SysAdmin, Infrastrucuture & Networks, IT Service Manager, Major Incident Manager, Technical Services / Infrastructure Manager then doing something a bit closer to what makes me happy which is currently a field engineer in the public sector. It's primarily second line but there's a smattering of servers and networks in there - not enough for my liking but being 'hands off' for a few years didn't help.

As I'm currently in the public sector and am back being 'hands on', I have to say I'm enjoying this more than I have anything else in the last 5 years. I've taken roughly a 40% drop in pay from the managers package I had, down to being a basic field engineer, but it's worth it. I'd like to get back into infrastucture support though and work more on servers and networks.

I fell into contracting after being made redudant twice in a year. The first one was through a bunch of cowboys. It was a daily rate, a lot of miles that I wasn't paid for, and I wasn't learning much. The second one is part projects and part business as usual. The first contract and their umbrella company were arseholes. Charged me £15 per invoice against the agency and despite telling me that they'd sort out Tax and NI, they were basically paying me cash in hand and I was paying them £15 to raise an invoice, and provide me with some public lliability insurance.

The second one is so much better. The agency and the umbrella are both slick outfits. It's a day rate but that's not the end of the world. I get paid 45p per mile, and the umbrella has told me about claiming my personal mileage from home to the office, plus meal allowance and all that jazz. The umbrella has ton of useful people I can speak to. Their website is pretty good and they also have an Android app for submitting expenses, mileage claims and reciepts which I like.

On the whole I'm really enjoying things at the moment. But, the client now wants me to stay on permenantly. I'm in two minds about this as I'd take a bit of a drop in pay, but it would get made up in more pence per mile. They've said I can move up through the old public sector bands but to be honest the knowledge and exposure to new technologies would be the main reason I'd stay. Hopefully with a chance to move to 3rd line for a year or two, then I'd definately want to be contracting again and earning closer to the £250-£300 per day mark working with VMware and the newer server versions.

I've got a little bit of time to decide what to do. Part of me says stay on and enjoy the security of being permenant again. But the other part of me says get some similar contracts under my belt, move around a bit, build a good reputation, take advantage of the tax I claim back and maybe start up an LTD and get VAT registered.

I really am 50/50 at the moment.