[Panchoa]

Hi all

After peoples opinions. Just found yesterday that my role is going be made redundant and i will be on the job market in the new year. Its never a good time to be made redundant but just before xmas is shite!!

I will get at least 3 months notice and its looking like i will be put on gardening leave. I work in IT and am curently Head of Development and Delivery, question i have is i am thinking going contracting on an interim basis as i am sick of the politcs that come with a perm role and managing people isnt ticking my boxes anymore, so what are peoples experiences of contracting and i keep hearing that contracting isnt as good as it used to be, why is this?

Thanks in advance all!

[gr4z]

Originally Posted by Panchoa

Hi all

After peoples opinions. Just found yesterday that my role is going be made redundant and i will be on the job market in the new year. Its never a good time to be made redundant but just before xmas is shite!!

I will get at least 3 months notice and its looking like i will be put on gardening leave. I work in IT and am curently Head of Development and Delivery, question i have is i am thinking going contracting on an interim basis as i am sick of the politcs that come with a perm role and managing people isnt ticking my boxes anymore, so what are peoples experiences of contracting and i keep hearing that contracting isnt as good as it used to be, why is this?

Thanks in advance all!

I went contracting after being made redundant from Microsoft 10 years ago. Best decision ever. Never been out of work. Turn work away more often that not. I work in Wintel infrastructure delivery. Made more than twice the amount of money in the last 10 years than if I had stayed where I was. Contracting no less secure than a permanent job, especially in IT.

Just be careful of IR35. Sign up with QDOS insurance who insure against it and review your contracts. Well worth the money.

[Wills2]

No experience but just wanted to say that's quite gutting just before Christmas, good luck with everything.

[R0B]

Good luck. Sounds like some relevant advice from Gr4z.

[Ss66]

Other half went contracting this year. She is more than happy doing it. More money and working one day less than she used to.

[Panchoa]

Originally Posted by Wills2

No experience but just wanted to say that's quite gutting just before Christmas, good luck with everything.

Cheers buddy. Yep, American owned company so they are all about £’s and nothing else so they couldnt give a shit about xmas or not! Just want to leave now and chill over xmas and start the job hunt in Jan

[AlanQS]

Bear in mind that the dreaded IR35 is going to apply to working for private companies from March 2020.

When it came into effect in March 2016 for public bodies (defined as any organisation that has to respond to a freedom of information request) the effect was that the day rates on offer went up by 60% when the number of vital contractor posts weren't getting filled. But it doesn't always happen. For those who don't know, if you are taking a freelance post under IR35 (and you aren't PAYE with the paying agency), the easiest way is to abandon the limited company and go into an umbrella group. The reason why it isn't popular is that out of the money you are paid, you have to pay full National Insurance rates, both employee and employer, and the full tax regime as if you are PAYE and it amounts to about a 25% to 30% reduction in net income for any given rate, in comparison with a limited company.

You end up paying more than a genuine salaried person but without any of the protections offered a salaried person (pension, holiday pay, sickness pay, death in service cover or anything). HMRC is getting it's revenge on everyone who has taken advantage of the rules for a long time.

If you are interested in a job and it's with a public body now, if the rate seems much higher than it used to be, you're covered, go ahead. After March 2020 you'll have to wait until the private sector gets the message before they start to respond.

This is just a rough outline, there are no doubt lots of fine detail not covered here so, please, anyone wants to add to this, go ahead, but leave out the "you're wrong, it's blah blab blah" since I've been in this position for the last five years, both public and private sector and I am just stating my experince to date.

[dazzapb]

All the best in whatever you plan to do.

I was contracting for around 5 years ironically just at two companies that I was also payroll paye staff at. Currently been perm for 10 years and I like the company I work for but granted contracting would be financially better but if I look at the holistic picture with ir35 risk, tax returns, holiday and training it’s a close call especially with a growing family.
Also in infrastructure with wide range of tech including public cloud (for I think worlds largest entertainment co) politics is always issue but want to stay technical so it’s a good fit for me. Would go back to contracting if I used umbrella co (and the day rate was good!) hopefully with 12 months of mortgage payments in savings etc. Doesn’t help that I have confidence issues is probably another reason I am where I am.
Trying to upskill in public cloud, Linux etc and I am liking it!
I recall my mates raking it in late 90s prior to ir35 I think the money is to be found in devops at the mo and other hot areas

[Wills2]

Originally Posted by AlanQS

Bear in mind that the dreaded IR35 is going to apply to working for private companies from March 2020.

When it came into effect in March 2016 for public bodies (defined as any organisation that has to respond to a freedom of information request) the effect was that the day rates on offer went up by 60% when the number of vital contractor posts weren't getting filled. But it doesn't always happen. For those who don't know, if you are taking a freelance post under IR35 (and you aren't PAYE with the paying agency), the easiest way is to abandon the limited company and go into an umbrella group. The reason why it isn't popular is that out of the money you are paid, you have to pay full National Insurance rates, both employee and employer, and the full tax regime as if you are PAYE and it amounts to about a 25% to 30% reduction in net income for any given rate, in comparison with a limited company.

You end up paying more than a genuine salaried person but without any of the protections offered a salaried person (pension, holiday pay, sickness pay, death in service cover or anything). HMRC is getting it's revenge on everyone who has taken advantage of the rules for a long time.

If you are interested in a job and it's with a public body now, if the rate seems much higher than it used to be, you're covered, go ahead. After March 2020 you'll have to wait until the private sector gets the message before they start to respond.

This is just a rough outline, there are no doubt lots of fine detail not covered here so, please, anyone wants to add to this, go ahead, but leave out the "you're wrong, it's blah blab blah" since I've been in this position for the last five years, both public and private sector and I am just stating my experince to date.

Jesus, they like their pound of flesh don't they? As usual they are looking to solve an issue and end up punishing everyone regards of whether they are taking the piss or not.

[DaveH28]

Originally Posted by Panchoa

Hi all

After peoples opinions. Just found yesterday that my role is going be made redundant and i will be on the job market in the new year. Its never a good time to be made redundant but just before xmas is shite!!

I will get at least 3 months notice and its looking like i will be put on gardening leave. I work in IT and am curently Head of Development and Delivery, question i have is i am thinking going contracting on an interim basis as i am sick of the politcs that come with a perm role and managing people isnt ticking my boxes anymore, so what are peoples experiences of contracting and i keep hearing that contracting isnt as good as it used to be, why is this?

Thanks in advance all!

I'm a contractor, software engineering.
There seems to be a few contracts out there, but the government do seem to want to tax to a point of 'what's the point'

[gr4z]

And have a look at some of the major IT projects within the public sector. Some are on their knees and having to pay over the odds to secure contractors. They, I.e us, end up paying more. It's just completely stupid and ill thought out. Again.

I heard some public sector IT managers have even setup their own IT consultancies and employ contractors direct to get round the issue. Even more stupid and sums it up.

[Panchoa]

Originally Posted by Wills2

No experience but just wanted to say that's quite gutting just before Christmas, good luck with everything.

Cheers buddy. Yep, American owned company so they are all about £’s and nothing else so they couldnt give a shit about xmas or not! Just want to leave now and chill over xmas and start the job hunt in Jan

[Watsey]

First thing : find, preferably through a personal recommendation from someone you know and trust (and who has operated a Limited Company for several years), a good accountant. Good does not necessarily mean an accounting practice (i.e. several/many employees and potentially higher charges), but it does mean an accountant that is very knowledgable regarding the IR35 criteria (otherwise known as the 'tests').

You, and your accountant, need to have a very clear and informed understanding off whether a role that you may be applying for would pass or fail the IR35 tests. If the role ends up being inside IR35 you will be in a disadvantaged situation unless the reimbursement for the role can be inflated to cover your losses.

The fundamental test for IR35 is whether, or not, you (or your Limited Company) are independent of the client. Tests include things such as :
- Ownership and use of your own company IT equipment.
- Not being given a client business card.
- Not being given a client mobile phone.
- Not receiving any employee benefits from the client : paid holidays, healthcare, general annual bonus, and the like.
- (crucially) providing a service, i.e. fixing a problem, rather than simply performing the tasks that are given to you. Example : management consultancy (analytics, strategy and delivery) versus a software contractor (processing/configuring code provided by the client). The latter would almost certainly be deemed to be disguised employment and therefore be judged to be within IR35.
- Having the contractual right of substitution (you are entitled to provide someone to provide the services on your behalf).
- Having more than one client per fiscal year or, even better (watertight), having several concurrent clients.
- Billing clients on a fixed price basis (you take the risk that the services take longer to complete than you envisaged) : "my company will deliver X solution for a fixed sum of £30,000". Obviously your proposal would be a lot more detailed than that. They key is not simply being engaged on a day rate for an undefined period of time. Most micro businesses don't like this approach as they are not able to control the client, i.e. pace, decision-making, and the like.
- Charging (and paying) VAT and paying Corporation Tax also help to demonstrate that you are managing a legitimate business rather than 'simply' being a day rate contractor.
- Having an actively updated website which includes case studies, knowledge articles, etc, from your own business can also help.

HMRC is trying to milk the small business sector because a) it thinks that these individuals and companies have been receiving tax breaks (a very misinformed view : they don't consider or fully assess the work patterns, income, fallow periods and risks over a period of years), and, b) because it's easier to extract money from the 'little guy' compared to large corporations which have highly paid tax strategists, finance departments and lawyers to construct international parent-child corporate structures for the purposes of tax minimisation.

Best of luck with it, but do your homework

[Ajs_435d]

Agree with the above.

Haha lots of people work in IT on here me included tbh and I also work as a contractor.

There's only 2 reasons you'll employ a contractor.. for short term or you can't fill that skill set so bear that in mind.

Is it as good as it used to be?... No. Companies are increasing looking employ perm because its cheaper works better with retaining knowledge and yes as above the government is going after the little guy as its easier so earnings will be less - they changed VAT for example.

Personally i do it for the money and variation but also you gain lots of experience quickly and get good exposure/don't get bored/kept fresh but you'll rarely get trained (funded by employer) in new technologies so you can get out of date/left behind quickly.

Notice period can be anything from 1 week etc, no sick pay, no pension, no paid leave etc job security etc.

Some cheeky recruitment consultants (bullshit pimps) will say you get a good rate/role which sounds good but when all said and done a staff role would be better overall, say you got £30 an hour a 60k staff would be better overall. With vat and corporation tax you can get massive chunks of tax to pay but you obviously budget for that and don't spend money that isn't yours, lastly even though you may see lots of money in your buisiness account you want to leave it as you'll get taxed at a high rate.

I'd try it if I were you.

[AlanQS]

HMRC has a tool on their web site to help the client body (public body at the moment) determine if the candidate will be within IR35 - i.e. a disguised employee) or outside it. Oddly enough when you put in details of people who have won court cases against HMRC proving they are outside IR35, the tool shows them to be inside.

HMRC also cunningly made it the responsibility of the payer (often a recruitment agency) to establish your status and they, to a man, said, to hell with this, I'm not risking being caught out by IR35 and straight away, pronounce you within IR35.

This is fine if the rates have been pushed up beyond what they used to be but I got caught out on the first week of the new rules in 2017 (even though I was leaving at the end of March) and Capita dictated to me what my new equivalent rate was, which allowed for employers and employee national insurance on the entire payment (first £156 in both cases, not supposed to be deductions) and then taxed me as if I had no tax free allowance at all so I got hit with an extra £90 of deductions which went into their pockets presumably.

[gr4z]

If you follow @ContractorCalc they campaign actively against IR35 and consistently argue the 'tool' provided by HMRC is fundamentally flawed. It has been tested again and again and found to be wrong.

Just adds more confusion around the whole thing and make people think again about being a contractor.