Some Newbie questions ad would appreciate some advice

[2funky]

Hello All,

I am just about to make the leap into contracting in the next couple of weeks, having been a permie for 15 years. I have been very unhappy at my current permie job where I have been for about 3 years - and although it pays well, I can't go on in the place. I have been offered a 12 month contract with my previous permie employee (who I worked for 3 yeasr ago for 11 years). I will be going in as a technical consultant, essentially providing the following services:

1. Technical consultancy for implementing a new solution to there estate
2. Some minor development (scripting)
3. Out of hours support (once every 5 weeks)
4. Some minor project management

Essentially it will be doing the a very similar role as I had done when I worked there.

I have been able to get a rate of 430/day for 12 months and I think there will be atleast 18-24 months of work initially.

I will be contracting with them directly and not through an Agency. I have been asked to draw up the contract and am worried that I have never done this before and I may miss something on the contract that I am drawing up. I need to get the contract drawn up in the next 2 days as I will be starting in 2 weeks.

Questions:

1. Is there anywhere I can download a good contract template that I can use for this?

2. One of the managers that I have been talking with to secure the contract has supplied me with a contract they used for another person that was working there. The contract states time and materials. Excuse my ignorance (as I don't fully understand T&M), but as I won't essentially providing any real deliverables like a piece of code or anything - would this be right for me?

3. What do I need to do to avoid IR35 as reading through various posts, I just can't seem to get my head around it.

4. I am going through the process of setting up my own ltd company (which should be complete tomorrow) and I will then need to wait for VAT registration etc, which could take upto 8 weeks, i believe. When I invoice the client - how would that work as I won't be VAT registered (most likely) within the next 1 month?

I would appreciate some help from some of the more experienced people..just trying to get this right the first time and not make the jump into contracting a bad experience !

Thanks all.

[mudskipper]

Hello All,

I am just about to make the leap into contracting in the next couple of weeks, having been a permie for 15 years. I have been very unhappy at my current permie job where I have been for about 3 years - and although it pays well, I can't go on in the place. I have been offered a 12 month contract with my previous permie employee (who I worked for 3 yeasr ago for 11 years). I will be going in as a technical consultant, essentially providing the following services:

1. Technical consultancy for implementing a new solution to there estate
2. Some minor development (scripting)
3. Out of hours support (once every 5 weeks)
4. Some minor project management

Essentially it will be doing the a very similar role as I had done when I worked there.

I have been able to get a rate of 430/day for 12 months and I think there will be atleast 18-24 months of work initially.

I will be contracting with them directly and not through an Agency. I have been asked to draw up the contract and am worried that I have never done this before and I may miss something on the contract that I am drawing up. I need to get the contract drawn up in the next 2 days as I will be starting in 2 weeks.

Questions:

1. Is there anywhere I can download a good contract template that I can use for this?

2. One of the managers that I have been talking with to secure the contract has supplied me with a contract they used for another person that was working there. The contract states time and materials. Excuse my ignorance (as I don't fully understand T&M), but as I won't essentially providing any real deliverables like a piece of code or anything - would this be right for me?

3. What do I need to do to avoid IR35 as reading through various posts, I just can't seem to get my head around it.

4. I am going through the process of setting up my own ltd company (which should be complete tomorrow) and I will then need to wait for VAT registration etc, which could take upto 8 weeks, i believe. When I invoice the client - how would that work as I won't be VAT registered (most likely) within the next 1 month?

I would appreciate some help from some of the more experienced people..just trying to get this right the first time and not make the jump into contracting a bad experience !

Thanks all.

The PGC have a contract template you can download - but for the one you need you will need to join. Alternatively your accountant may be able to supply you one (mine did).

Lots of info about IR35 in the links on the right. Main thing is to make sure you're different to the permies. Unless absolutely convinced otherwise, assume you're outside. And if you do join the PGC as above, they will represent you in the extremely unlikely event that you're investigated.

The other thing I would recommend (which my contract template didn't have) is to get payment terms written into the contract.

Re: VAT, you can invoice without VAT, then when your registration comes through (assuming it's backdated) send a VAT only invoice for the VAT. Your accountant should be able to advise you. Also, worth noting that you can claim VAT back for any purchases made by your company before you register for VAT (assuming you're on the flat rate scheme) so worth buying that new laptop first!

Good luck!

[2funky]

Thank you for your reply and I'll look at signing up with PGC - but don't think I have the time at the moment.

A few more questions, I hope someone can help me with with regards to Insurance. I am the only shareholder of the company at the moment and I have been advised from a few contractors to get the following insurances in place:

1. Employers Liability
2. Public Liability
3. Professional Indemnity company insurance
4. IR35 Tax insurance

I have been pointed to QDOS (Qdos Consulting - Taxation & VAT, Employment Law, Insurance, IR35)

So do I need all of the above insurances and is there any recommendations on any other insurance suppliers?

Thanks again for your help.

[Hex]

Thank you for your reply and I'll look at signing up with PGC - but don't think I have the time at the moment.

A few more questions, I hope someone can help me with with regards to Insurance. I am the only shareholder of the company at the moment and I have been advised from a few contractors to get the following insurances in place:

1. Employers Liability
2. Public Liability
3. Professional Indemnity company insurance
4. IR35 Tax insurance

I have been pointed to QDOS (Qdos Consulting - Taxation & VAT, Employment Law, Insurance, IR35)

So do I need all of the above insurances and is there any recommendations on any other insurance suppliers?

Thanks again for your help.

Lots of posts about this. Check out PCG as well for insurance.

[PSK]

Please don't take this personally but judging by your questions, I would consider taking a bit of formal advice from a decent, local accountant or from PCG or some other, reliable source of advice. I'm a bit more focused on contracts and legal issues than many on this forum given my particular background, experience and skill set and judging by what you've said, I'd be a bit concerned at what might result.

In answer to your questions,

1) I don't know of a decent template that is available online without paying someone and, if there were, you'd need the skills to evaluate it and you might still need to understand what you know and don't know to be able to judge what needs to change to suit your own circumstances. Regarding another contractor's contract, it would depend on whether they're doing the same job and whether their contract is up to date and decent. It's good that your client doesn't appear to be a shark though that can change after 12 months if a problem arises. There are some things (IR35 amongst others) that are informed by the contract (and by working practices).

2) I'd expect time and materials to relate to them paying you by the hour/day rather than tying you down to a fixed rate. Often, it's better for the contractor to be on T + M rather than a fixed rate unless the contractor understands the job and can control most of the issues to enable them to make sure the price exceeds the costs.

3) IR35 - I'd be concerned when you say 'Essentially it will be doing the a very similar role as I had done when I worked there.' There might be some things you could do but a combination or doing something similar to the work/working in the same way as permies have done, a DIY approach to contracts and not seeking specialist advice might not be good.

4) VAT - what they've said in the other replies to your post.

Insurances - Your client would/should probably insist on the first three anyway, especially if you will be based on their site. If you go for IR35 insurance then you'll probably end up with the contract reviews and advice that you may benefit from anyway.

Good luck.