IT Contracting
Discussion
Is it as bad idea as I think it might be to quit a permanent post for a 3 month contract right now?
Not sure how to compare permanent salaries with contract rates, they sound great, but would you say, swap a 30k salary for £250/day?
IR35 - is it easy to fall outside IR35, are most contracts written with it in mind, are they likely to investigate?
Not sure how to compare permanent salaries with contract rates, they sound great, but would you say, swap a 30k salary for £250/day?
IR35 - is it easy to fall outside IR35, are most contracts written with it in mind, are they likely to investigate?
Very interesting.
I'm sure there's others here who would offer you advice but I would ask you to consider a few things....
1) There are pure contractors and there are people who do the odd contract between permy roles. If you are the former, dyed in the wool, then you've got to develop a mindset. If not be prepared for some timewasting by some agencies who only deal with their network of guys who've done regular business for them before.
2) There are (on the face of it) loads of juicy contracts out there. Then you apply for one, and little do you realise that you maye be going up against 1-200 people as well. The CV's right now flood in to some agencies. It's up and down.
3) 30k vs £250 a day is no contest. £250 a day. Of course you'll know about the lack of benefits etc....
4) For the headline figure to count you need to turn yourself into a Ltd. Then it's all dividends, copr tax etc. Then it's a good accountant who'll - for a fee - recoup your costs.
5) If you don't, then your just PAYE for the agency - if they do it - and NI wise, you get stung more.
6) I know plenty of people who one day they are told, "we need you to take a 10% pay cut." It's happening all over the city. Be prepared.
7) Very very very few people who think they are contractors, genuinely are IR35. They can't genuinely get the status and end up PAYE for the agency. There is criteria for this..........
a few thoughts........
I'm sure there's others here who would offer you advice but I would ask you to consider a few things....
1) There are pure contractors and there are people who do the odd contract between permy roles. If you are the former, dyed in the wool, then you've got to develop a mindset. If not be prepared for some timewasting by some agencies who only deal with their network of guys who've done regular business for them before.
2) There are (on the face of it) loads of juicy contracts out there. Then you apply for one, and little do you realise that you maye be going up against 1-200 people as well. The CV's right now flood in to some agencies. It's up and down.
3) 30k vs £250 a day is no contest. £250 a day. Of course you'll know about the lack of benefits etc....
4) For the headline figure to count you need to turn yourself into a Ltd. Then it's all dividends, copr tax etc. Then it's a good accountant who'll - for a fee - recoup your costs.
5) If you don't, then your just PAYE for the agency - if they do it - and NI wise, you get stung more.
6) I know plenty of people who one day they are told, "we need you to take a 10% pay cut." It's happening all over the city. Be prepared.
7) Very very very few people who think they are contractors, genuinely are IR35. They can't genuinely get the status and end up PAYE for the agency. There is criteria for this..........
a few thoughts........
ali_kat said:
Right now, stick with the day job!
HTH
+1HTH
I want out of contracting and back in to a nice perm job with good career structure. Ask yourself what'll happen at the end of the 3 month contract if you can't get another contract, it ain't a nice position to be in in a highly competitive market.
Cheers,
Rob
Umm its a mixed bag. Ive been conracting all my life. There are ups and downs. Present situation is possibly good, possibly bad depending on many things.
Firstly depends who you are planning on contracting to?
What contacts do you have?
Do you have a reputation to rely on? ( this is important as it can make or break you as a contractor with getting work)
Do you believe you can make 30k a year contracting (shouldnt be too hard in IT in theory)?
Can you afford to make less than 30k a year contracting?
Banks at the mo could be very good for it as they may be getting rid of perm staff and replacing with temp/contract staff to try lower overheads.
However the banks may be shutting up shop in terms of hiring as well and its really going to get to be a hirers market i think.
At the end of the day contracting in almost any field can be very hit and miss. Get it lucky and make the right contacts and have the right skills you can pick and choose and make very good money. But the opposite is equally true.
Get unlucky and you could suffer very badly.
Lastly if you leave your job now yet again there may be less jobs for you to go back to due to the recession that we are having/heading into/had etc.
QUick q: WHat is your skill set and background workwise?
Firstly depends who you are planning on contracting to?
What contacts do you have?
Do you have a reputation to rely on? ( this is important as it can make or break you as a contractor with getting work)
Do you believe you can make 30k a year contracting (shouldnt be too hard in IT in theory)?
Can you afford to make less than 30k a year contracting?
Banks at the mo could be very good for it as they may be getting rid of perm staff and replacing with temp/contract staff to try lower overheads.
However the banks may be shutting up shop in terms of hiring as well and its really going to get to be a hirers market i think.
At the end of the day contracting in almost any field can be very hit and miss. Get it lucky and make the right contacts and have the right skills you can pick and choose and make very good money. But the opposite is equally true.
Get unlucky and you could suffer very badly.
Lastly if you leave your job now yet again there may be less jobs for you to go back to due to the recession that we are having/heading into/had etc.
QUick q: WHat is your skill set and background workwise?
IR35 is a state of mind, but can be broken down into 2 areas: the contract and the actual working conditions. You can get your contract reviewed by the likes of Bauer & Cottrell for IR35 friendliness, but this will be moot if your actual working day is more employee-like. HMRC's first port of call is the contract. If that looks OK, then they will go after the working practices. Look at the recent case of Dragonfly http://www.contractorcalculator.co.uk/contractor_d...
You could always work on the principle that you are caught by IR35, pay the appropriatly higher tax
but sleep easily. If you go umbrella, then you are treated as an employee anyway, so IR35 is irrelevant.
As to whether it's a good idea or not... only you can decide the risk. I would suggest if you
have easily available, off the shelf, commodity skills (perhaps those that can be off-shored), then you may be better waiting in permie-dom. If you have niche, properly specialist skills you may be better off. Of course, the correlation between skillset, contract availability and rate is there - commodity skills, lots of contracts, lower rates. Specialist skills, fewer opportunities, higher rates.
A very rough guide to contract vs permy value is take the hourly rate and multiply by 1000.
Personally, in this turbulent climate where there are going to be lots of projects pulled, lots of decision makers losing their jobs, potentially lots of business going under I'd stick where you are and keep an eye on the market till the beginning of next year. Having said that your job is only as good as your current notice period
FWIW I'm going to continue to contract indefinitely, balls to your biting recession
You could always work on the principle that you are caught by IR35, pay the appropriatly higher tax
but sleep easily. If you go umbrella, then you are treated as an employee anyway, so IR35 is irrelevant.
As to whether it's a good idea or not... only you can decide the risk. I would suggest if you
have easily available, off the shelf, commodity skills (perhaps those that can be off-shored), then you may be better waiting in permie-dom. If you have niche, properly specialist skills you may be better off. Of course, the correlation between skillset, contract availability and rate is there - commodity skills, lots of contracts, lower rates. Specialist skills, fewer opportunities, higher rates.
A very rough guide to contract vs permy value is take the hourly rate and multiply by 1000.
Personally, in this turbulent climate where there are going to be lots of projects pulled, lots of decision makers losing their jobs, potentially lots of business going under I'd stick where you are and keep an eye on the market till the beginning of next year. Having said that your job is only as good as your current notice period
FWIW I'm going to continue to contract indefinitely, balls to your biting recession Edited by bigandclever on Thursday 18th September 20:14
bigandclever - you're the dyed in the wool type i'm talking about 
Projects in many places - not all for sure - but a lot of finance houses are getting pulled. I know that much. Of course there's the impending freeze that will be due near on end of year, but right now people want system stability and are more reluctant for 'change'. It's 'run' for now.
Projects in many places - not all for sure - but a lot of finance houses are getting pulled. I know that much. Of course there's the impending freeze that will be due near on end of year, but right now people want system stability and are more reluctant for 'change'. It's 'run' for now.
jimmyb said:
QUick q: WHat is your skill set and background workwise?
Java developer - the usual J2SE, JEE, Oracle, Unix, I'm pretty useful outside that role in terms of some C, shell scripting, networks, etc but I wouldn't expect that to be a big selling point as a contractor.3 1/2 years in two permanent Java developer roles since degree, first at a company subcontracted on the NHS project, second at an IPTV company.
I've got some cash for a house deposit tucked away and no mortgage so I could cope with gaps in work, but I'd prefer not to take a step backward. If it was a 6 month role I think I'd feel a lot more comfortable with it, though even then I'd probably be a little nervous.
tigerkoi said:
Hate to say it, but if you have those skills in firm shape then 30k is well under the going rate. Sorry. You should have far better remuneration if you 'know' Oracle, Unix, and can program. You can't be in London?
Honesty appreciated. No, I'm in South Wales, you wouldn't believe the pittance I was on in the North East last year!
cs02rm0 said:
jimmyb said:
QUick q: WHat is your skill set and background workwise?
Java developer - the usual J2SE, JEE, Oracle, Unix, I'm pretty useful outside that role in terms of some C, shell scripting, networks, etc but I wouldn't expect that to be a big selling point as a contractor.3 1/2 years in two permanent Java developer roles since degree, first at a company subcontracted on the NHS project, second at an IPTV company.
I've got some cash for a house deposit tucked away and no mortgage so I could cope with gaps in work, but I'd prefer not to take a step backward. If it was a 6 month role I think I'd feel a lot more comfortable with it, though even then I'd probably be a little nervous.
Unix is a bit better, quite a few claim, not that many actually can.
No worries! I mean that with no hint of anything. Of course rates in London and the South East do tend to skew things - have a look at itjobswatch for instance.
But I'm sincere in that. Of course there are many parameters. The size of the org, the need they place on IT etc all affect how much they value paying well their staff.
For instance a Helpdesk Manager in an SMB in West End with two line managed might earn 30k. A desktop engineer with Bloomberg skills and ability to fix excel problems for his red-faced trader could get 50k in some bank? Know what I mean? But skills like you have generally command more than that in London.
Good luck with whatever you choose........
But I'm sincere in that. Of course there are many parameters. The size of the org, the need they place on IT etc all affect how much they value paying well their staff.
For instance a Helpdesk Manager in an SMB in West End with two line managed might earn 30k. A desktop engineer with Bloomberg skills and ability to fix excel problems for his red-faced trader could get 50k in some bank? Know what I mean? But skills like you have generally command more than that in London.
Good luck with whatever you choose........
I'm an employer - if I wanted a temporary java coder with those skills I'd go offshore; and I'd be paying not far off £30k with a world-class vendor.
I think your problem is that you're underpaid; in the current climate I'd look for a better employer rather than go contract.
By the way, I'm not anti-contracting, I did it myself for a few years.
I think your problem is that you're underpaid; in the current climate I'd look for a better employer rather than go contract.
By the way, I'm not anti-contracting, I did it myself for a few years.
cs02rm0 said:
jimmyb said:
QUick q: WHat is your skill set and background workwise?
Java developer - the usual J2SE, JEE, Oracle, Unix, I'm pretty useful outside that role in terms of some C, shell scripting, networks, etc but I wouldn't expect that to be a big selling point as a contractor.3 1/2 years in two permanent Java developer roles since degree, first at a company subcontracted on the NHS project, second at an IPTV company.
I've got some cash for a house deposit tucked away and no mortgage so I could cope with gaps in work, but I'd prefer not to take a step backward. If it was a 6 month role I think I'd feel a lot more comfortable with it, though even then I'd probably be a little nervous.
I work in Oracle ERP systems and £250 a day is pretty low but then again I've got just about 10 years experience. I'd be wary of quitting a permie role right now. It may be worth building a bit more experience while the economic times are hard with a view to going contracting when things pic up.
Good luck with whatever you decide anyway.
cs02rm0, have you been to itjobswatch to get the stats on your skillset vs opportunity vs rate? You should anyway.
Take the number of contracts advertised in the usual places and just divide the nunmber by 10 before you even start assessing the actual, current, opportunity list.
Read the first timer guides on the pcg and contractoruk websites.
And consider how flexible you reallyare... location, role, rate, duration, and so on. Again FWIW I work on a 200 day year - there are about 240 you can actually work, so if you have a bit of a holiday (HA! you're a money grabbing contractor), a bit of sick (HA! again, you'll be invincible and immune to permy disease), but always look at the worst case scenario. s
ttest rate, in the worst location, with lots of bench time... if it still looks viable go for it, your current job must be horrible to want to swap to that! The bonus of course is that when it actually does work you make significant wedge, your quality of life improves and the world's your lobster. But maybe not right now
Take the number of contracts advertised in the usual places and just divide the nunmber by 10 before you even start assessing the actual, current, opportunity list.
Read the first timer guides on the pcg and contractoruk websites.
And consider how flexible you reallyare... location, role, rate, duration, and so on. Again FWIW I work on a 200 day year - there are about 240 you can actually work, so if you have a bit of a holiday (HA! you're a money grabbing contractor), a bit of sick (HA! again, you'll be invincible and immune to permy disease), but always look at the worst case scenario. s
ttest rate, in the worst location, with lots of bench time... if it still looks viable go for it, your current job must be horrible to want to swap to that! The bonus of course is that when it actually does work you make significant wedge, your quality of life improves and the world's your lobster. But maybe not right now smutbag said:
IMO you ain't gonna get much work. Every CV I see has java development on it, in fact I have yet to meet a developer who doesn't say they can write decent java script.
Woah, java isn't the same as javascript!3 1/2 years isn't a lot of experience for a contractor really. When I interview contractors (which I do a lot) I expect them to be excellent technically. The whole point is that you can just give them a project and say - get on with it. Technical ability is the only thing that matters, so you better really know your stuff.
Edited by 130R on Thursday 18th September 20:35
Hi smutbag - There is that. However it's in the CV isn't it? Lots do claim to have skills in certain areas but the skill in reading someone's work history, seeing the projects/work they have done, assessing them and their quality in an interview, really sorts the wheat........
There are loads of commodity skills across the IT board that many say they have........
There are loads of commodity skills across the IT board that many say they have........
smutbag said:
IMO you ain't gonna get much work. Every CV I see has java development on it, in fact I have yet to meet a developer who doesn't say they can write decent java script.
Unix is a bit better, quite a few claim, not that many actually can.
Javascript != Java.Unix is a bit better, quite a few claim, not that many actually can.
I haven't seen much call for solely Unix skills? I've been solely using Linux/Solaris at home for 7/8 years so I'd hope I can find my way around a bit there.
I'm wondering if placing a financial value on my skills is a weakness of mine.
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