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View Full Version : Made Redundant thinking of contracting ..... Newbie also



dugganator
12th September 2012, 20:26
Hi all

Recently been made redundant last Thursday :devil to be fair I made a move into management hoping for new things but the job didnt lead where I was it hoping it would go and being made redundant only after being there a short period 9 months seems to be "at the moment" for the better.

Anyway I have been reading about contracting and I like the idea of working for my own company while taking a little more money home. But today has been my first real day of applying for work. So far I haven't limited myself location wise just on the contracts I feel I can do. What I would like to know is really should I register my company first/now or wait until I land my first contract?

So far I have been reading alot and seems like alot to get your head around to start with but I guess its one of those things that once you land that first contract you can work out the stuff as you go along and find your feet.

So far contractor Uk has been really help hence why joining i'm hoping some of you may be able to guide the blind aka me. Oh I should say I have 8 years experience in support from 1st to 3rd line working in a mix of roles from help desk,operations,dc engineer etc so primarily looking at the support type of roles to start with.

Anyway if anyone could make any key suggestions I would be interested in hearing them to make sure im doing the right thing or if there is anything else I should be looking at or thinking about.

Cheers in advance

northernladuk
12th September 2012, 22:46
Wrong. It isn't one of those things you learn as you go along. You will be running a business and be legally responsible for the finances of that company.
How can we make key suggestions when we don't know what you already know? Saying that one could be to do a lot more research before asking questions. We can't hand hold you through it. Did you read the stickies at the top of the thread, have read the newbies guide to the right and digested every other link that is there, have you used Google, have you tried searching the forums as described in one of the stickers etc etc. It will be your business so time to step up. No more hand holding and hiding behind the boss now......

Oh and welcome :wave:

dugganator
12th September 2012, 23:11
Wrong. It isn't one of those things you learn as you go along. You will be running a business and be legally responsible for the finances of that company.
How can we make key suggestions when we don't know what you already know? Saying that one could be to do a lot more research before asking questions. We can't hand hold you through it. Did you read the stickies at the top of the thread, have read the newbies guide to the right and digested every other link that is there, have you used Google, have you tried searching the forums as described in one of the stickers etc etc. It will be your business so time to step up. No more hand holding and hiding behind the boss now......

Oh and welcome :wave:

Ok think your reply is a bit harsh as running any business you will have to learn things as you go no one just knows everything at the start. Well I say that without being a contractor maybe you all do and im doing something wrong haha

I understand what your getting at btw.

But to answer your question yes I have read the stickies and the first timers guide hence why my main question was should I have my company setup now or when I get my first contract. The reason I said if anyone had any suggests was a simple one to be honest I dont think there is a harm in being told something twice just in case I have missed something or a important points some people fall over at the first.

Your not wrong I just dont want to make any simple mistakes but if this isnt the place to ask ill keep googling, my mistake and apologies if I missed the seaction for not being able to ask the above.

cojak
13th September 2012, 00:00
Hi dugganator, welcome to CUK. :)

While it isn't a large amount, it will cost you a bit of money to create a company and can be a bit of a hassle to close if you find yourself with a newly minted Ltd and a permie job offer.

But if you do want to go the contractor route, I'd create a company before you find a contract. That way you won't have to rush everything through on the Friday before you start your 1st contract.

MintyBloke
13th September 2012, 07:15
In case you are not already aware, some accountancy firms will set up your ltd company for you, so if you haven't already found an accountant it is worth taking into account (pardon the pun).

As you have just been made redundant, I would keep your outgoings to a minimum until you get offered something then sign up with one of the accountants often mentioned here to get your ltd setup. Once offered a contract get it reviewed with someone like qdos which will take a few days during which you can sort out the rest.

Just keep reading this forum and make sure you are ready and know what you need to do once that contract arrives. Good luck!

malvolio
13th September 2012, 07:21
And since you clearly have a lot of learning to do and feel it's best done once you've started, then I suggest you go umbrella for the first gig. That way you won't have the chance to do irreversible damage and you will have the time to do your on-the-job learning ( a bad idea, but hey, it's your money).

But I agree with NLUK; know what you;re doing first. This is not a game or a short term alternative until something better comes along. Nor is it a guarantee to easy money. I'm pretty good at what I do and I've averaged (and budgeted on) 7 months a year paid work over the last ten years. The people that keep going month after month and have thrree contracts to pick from when they need them are not management.

doomage
13th September 2012, 09:36
The first-timers guide is not big enough to have an answer for every individuals situation. I recommend:

1) Commit yourself to a course of action, and follow through until it is done.

2) Mitigate risk through preparation.

3) Succeed.

Alternatively, pussyfoot around, play it safe, and hope for the best.

Good luck and welcome to the forum.

Harmonic
13th September 2012, 10:12
I was in a similar position as I was made redundant from my last permie job in February.

The first decision I made was that I wasn't going to look for another permie job and that I'd use my redundancy payment to cover however long it took to get my first contract. I then found a decent accountant who setup the limited company for me.

I did think about an umbrella but I think if you're unsure about sticking with contracting then it's a simpler option that starting a Ltd. Co. but it can make a fairly serious difference to your take home earnings.

I got a 6 month contract within a couple of weeks of leaving my permie job and have just got a 7 month extension although I've been given an unofficial heads-up that the project might get binned so I'm interviewing for other contracts.

As has already been said the best bet is to decide what you want to do and then jump in both feet and go for it.

Support Monkey
13th September 2012, 11:12
I was in a similar position as I was made redundant from my last permie job in February.

The first decision I made was that I wasn't going to look for another permie job and that I'd use my redundancy payment to cover however long it took to get my first contract. I then found a decent accountant who setup the limited company for me.

I did think about an umbrella but I think if you're unsure about sticking with contracting then it's a simpler option that starting a Ltd. Co. but it can make a fairly serious difference to your take home earnings.I got a 6 month contract within a couple of weeks of leaving my permie job and have just got a 7 month extension although I've been given an unofficial heads-up that the project might get binned so I'm interviewing for other contracts.

As has already been said the best bet is to decide what you want to do and then jump in both feet and go for it.

Go with the umbrella option for the first 12 month, see how you get on, its easier to walk away from than a Ltd company, yes your gonna take a hit on the money initially but in 12 months if you decide thsi is the life for you you can then sort out all the LTD company stuff, and when you get a contract you can concentrate on the work initially without also having to worry about if you filled your VAT form in correctly

northernladuk
13th September 2012, 11:32
Go with the umbrella option for the first 12 month, see how you get on, its easier to walk away from than a Ltd company, yes your gonna take a hit on the money initially but in 12 months if you decide thsi is the life for you you can then sort out all the LTD company stuff, and when you get a contract you can concentrate on the work initially without also having to worry about if you filled your VAT form in correctly

Agreed. I think the previous poster calling it a serious hit is a bit of a wild statement though. It can vary wildly depending on your situation but better for the person in question to do the sums rather than just assume he will be seriously out of pocket. Cash effect aside he is going to think umbrella was a better option when the VAT man has him pants down over a barrel.

TestMangler
13th September 2012, 11:35
Agreed. I think the previous poster calling it a serious hit is a bit of a wild statement though. It can vary wildly depending on your situation but better for the person in question to do the sums rather than just assume he will be seriously out of pocket. Cash effect aside he is going to think umbrella was a better option when the VAT man has him pants down over a barrel.

Nothing like overstating the case to get a point over :laugh

MarillionFan
13th September 2012, 12:31
Wrong. It isn't one of those things you learn as you go along. You will be running a business and be legally responsible for the finances of that company.
How can we make key suggestions when we don't know what you already know? Saying that one could be to do a lot more research before asking questions. We can't hand hold you through it. Did you read the stickies at the top of the thread, have read the newbies guide to the right and digested every other link that is there, have you used Google, have you tried searching the forums as described in one of the stickers etc etc. It will be your business so time to step up. No more hand holding and hiding behind the boss now......

Oh and welcome :wave:

Balderdash. Of course its one of those things you learn as you go along. We weren't all born 'know-it-alls' NLUK! :devil

Read the stickies on how to set up a choose a name, set up a company & insurance(don't go mad on this), then get a bank account, then once you've got a gig and been paid get an accountant. Simples.

northernladuk
13th September 2012, 12:57
Balderdash. Of course its one of those things you learn as you go along. We weren't all born 'know-it-alls' NLUK! :devil

Read the stickies on how to set up a choose a name, set up a company & insurance(don't go mad on this), then get a bank account, then once you've got a gig and been paid get an accountant. Simples.

Well yes of course, I wasn't talking about all of it but was making reference to the fact the OP thinks getting a contract first and then learning is the right way, which it isn't. Getting a gig before he set his LTD up isn't correct as an example. :p

MarillionFan
13th September 2012, 17:47
Well yes of course, I wasn't talking about all of it but was making reference to the fact the OP thinks getting a contract first and then learning is the right way, which it isn't. Getting a gig before he set his LTD up isn't correct as an example. :p

I got my first gig without a Ltd Company. Wet behind the ears I was. Greener than a spring pasture. Still making it up on a day to day basis now. :tongue

Wanderer
13th September 2012, 21:15
As others have said, umbrella is the easiest way to go but you are going to pay a lot of tax, especially if you took a redundancy payoff or you were a 40% taxpayer already. Put the numbers into a reliable calculator (https://www.nixonwilliams.com/net_pay_calculator.asp) and don't trust the bulltulip calculators that the umbrella companies offer you.

Setting up a LTD company is pretty quick and easy, I guess you can shut it down again without trading if when you get offered a nice permie job but there is a fair amount of admin pain in running your own company. An accountant is absolutely essential - don't start a company without one or you will bugger it up and cost yourself a lot of money in avoidable tax and fines from HMRC.

Good luck!

dugganator
14th September 2012, 12:46
Sorry I havent replied had a few things ive had to deal with the pass day.

Thanks for all the replies. Its true that I'm still learning and have more to read up on maybe the stuff provide here isnt enough or I should think its enough before getting to far ahead.

Problem is im now affective unemployed so I'm using this time to search for work. I have held off registering a ltd company just from the money front if im out of work for the long term every penny counts as sad as that sounds. I have had a few calls but nothing really at the stage of offering interviews so stuck now on whenever its a bad time for me to start contracting or just getting ahead of myself as its only been a few days and I should wait a couple of weeks before my cv gets about.

So im not trying to understatement contracting yet but in my position I might as well read/learn while im unemployed. The longer im unemployed the more ill learn/know but if a job was to suddenly pop up I would have to take the job so I still have money coming in etc.

Thanks for all the people that gave advise. The only thing im doing after I finish this is rewrite my cv more geared towards contracting as it would seem at the moment my cv is a bit long winded and geared towards more permie jobs.

northernladuk
14th September 2012, 13:11
So im not trying to understatement contracting yet but in my position I might as well read/learn while im unemployed. The longer im unemployed the more ill learn/know but if a job was to suddenly pop up I would have to take the job so I still have money coming in etc.

Autocorrect error :)

To be honest with you you either go contracting or don't bother. I have met so many people in RL as well as on these boards that dip their toe because it is easier to get than going permie. It isn't a stop gap. It has many more pitfalls, much more legislation and legallities to it than perm. You have to understand them all. Ok people don't but that just means they shit contractors. It will catch them up hopefully.

After your first gig or two and few months on the bench sweating like dog crapping glass they go back perm with a financial mess waiting to bite them further down the line.

Don't just look at the money and number of roles/ease of getting them. Look at the bad stuff. Can you be out of a gig 3 months a year, do you have the money behind you to support it. Can you cope with being on the bench? Some people just can't hack it. Your first gig might be close to home but after that you might have to travel the country. Do you mind being the scapegoat for a failing project and get shouted at about stuff you can do nothing about everyday.

Don't come in if you are not commited.

MarillionFan
14th September 2012, 13:24
Autocorrect error :)

To be honest with you you either go contracting or don't bother. I have met so many people in RL as well as on these boards that dip their toe because it is easier to get than going permie. It isn't a stop gap. It has many more pitfalls, much more legislation and legallities to it than perm. You have to understand them all. Ok people don't but that just means they tulip contractors. It will catch them up hopefully.

After your first gig or two and few months on the bench sweating like dog crapping glass they go back perm with a financial mess waiting to bite them further down the line.

Don't just look at the money and number of roles/ease of getting them. Look at the bad stuff. Can you be out of a gig 3 months a year, do you have the money behind you to support it. Can you cope with being on the bench? Some people just can't hack it. Your first gig might be close to home but after that you might have to travel the country. Do you mind being the scapegoat for a failing project and get shouted at about stuff you can do nothing about everyday.

Don't come in if you are not commited.

You let people shout at you? Wow. :eek:

dugganator
14th September 2012, 13:48
Autocorrect error :)

To be honest with you you either go contracting or don't bother. I have met so many people in RL as well as on these boards that dip their toe because it is easier to get than going permie. It isn't a stop gap. It has many more pitfalls, much more legislation and legallities to it than perm. You have to understand them all. Ok people don't but that just means they tulip contractors. It will catch them up hopefully.

After your first gig or two and few months on the bench sweating like dog crapping glass they go back perm with a financial mess waiting to bite them further down the line.

Don't just look at the money and number of roles/ease of getting them. Look at the bad stuff. Can you be out of a gig 3 months a year, do you have the money behind you to support it. Can you cope with being on the bench? Some people just can't hack it. Your first gig might be close to home but after that you might have to travel the country. Do you mind being the scapegoat for a failing project and get shouted at about stuff you can do nothing about everyday.

Don't come in if you are not commited.

Bloody autocorrect... or more me not proof reading haha.

See I have wanted to go contracting for ages but I have always said I would do this if made redundant as it seemed to be fair harder to want to do this going from a permie job to contracting then from no job to contracting.

Hence why i'm now thinking "you have said it long enough, time to step up and see if you can do it" I have planned to set aside money for the short falls but this is all depends on me getting a contract in the first place :happy. This I guess (you guys can tell me) seems easier said then done.

I have to say I dont like being out of work but who does. I've always wanted to be my own boss i think once again everyone wants that at some point.

I was hoping maybe to start at a lower level then my previous jobs as the contracts seem to pay more then I was getting anyway this way I can be really confident in jobs I know I can do with ease while making sure I understand everything required before moving on to the harder jobs that might apply the stress factor on top on running my company. Maybe thats the wrong way of going about things I dont know.

northernladuk
14th September 2012, 14:12
I was hoping maybe to start at a lower level then my previous jobs as the contracts seem to pay more then I was getting anyway this way I can be really confident in jobs I know I can do with ease while making sure I understand everything required before moving on to the harder jobs that might apply the stress factor on top on running my company. Maybe thats the wrong way of going about things I dont know.

One thing to remember, clients take you on as you are a seasoned specialist at what you do. Contracting is not for 'good all round guys' or jack of all trades that can be an asset to a company when trained. They want someone to hit the ground running on day one and bring the experience they have to the company. If you do not have the demonstrable experience that is required for the gig in question you will not get it. Period. If you have 10 years as PM you will not get a PMO role for a number of reasons. Main one is client will think you are filling in and will bugger off when you get the right rate. The other one is that PMO skills are different to PM's. Being percieved as a higher level doesn't mean you are an expert at a lower level role. You have your work cut out as a newbie (depending on your skillset) as it is as you are a big risk to the client. Does he get you in who might be a dead weight for awhile and then leave because you don't like it or a seasoned contractor who is going to see it to the end. I don't think looking for lesser role or roles that 'you think you can do' will work.

You are a business now, selling your skills, not an ex permie that can have a go at anything. If your CV and skills don't meet the job spec that you are applying for you are wasting your time.

I just can't help but think your approach to this is just totally wrong and you are just not getting what contracting is about.

dugganator
14th September 2012, 14:28
One thing to remember, clients take you on as you are a seasoned specialist at what you do. Contracting is not for 'good all round guys' or jack of all trades that can be an asset to a company when trained. They want someone to hit the ground running on day one and bring the experience they have to the company. If you do not have the demonstrable experience that is required for the gig in question you will not get it. Period. If you have 10 years as PM you will not get a PMO role for a number of reasons. Main one is client will think you are filling in and will bugger off when you get the right rate. The other one is that PMO skills are different to PM's. Being percieved as a higher level doesn't mean you are an expert at a lower level role. You have your work cut out as a newbie (depending on your skillset) as it is as you are a big risk to the client. Does he get you in who might be a dead weight for awhile and then leave because you don't like it or a seasoned contractor who is going to see it to the end. I don't think looking for lesser role or roles that 'you think you can do' will work.

You are a business now, selling your skills, not an ex permie that can have a go at anything. If your CV and skills don't meet the job spec that you are applying for you are wasting your time.

I just can't help but think your approach to this is just totally wrong and you are just not getting what contracting is about.

Well I have applied for roles I have done well in the past and know inside and out. I'm not applying for roles I dont know what i'm doing. I have worked my way up through the ranks and worked a mix of different roles so its not like I would need hand holding.

Ill be honest I don't have a skillset that i think im 100% in other then my years of support experience which are once again the roles im applying for. I've passed many exams over the years which are selling points I guess but I don't have a streamlined set ie just vmware or citrix. I have supported both but don't have qualification in those fields yet.

Are you thinking more about yourself in contracting and how you run your business which in most cases im sure will be different from mine. As you sound like your coming from the very set skillset contractor? just interested is all im not trying to second guess

northernladuk
14th September 2012, 15:09
Well I have applied for roles I have done well in the past and know inside and out. I'm not applying for roles I dont know what i'm doing. I have worked my way up through the ranks and worked a mix of different roles so its not like I would need hand holding.

Ill be honest I don't have a skillset that i think im 100% in other then my years of support experience which are once again the roles im applying for. I've passed many exams over the years which are selling points I guess but I don't have a streamlined set ie just vmware or citrix. I have supported both but don't have qualification in those fields yet.

Are you thinking more about yourself in contracting and how you run your business which in most cases im sure will be different from mine. As you sound like your coming from the very set skillset contractor? just interested is all im not trying to second guess

Nope, am trying to give you the low down on how it is from my experience and from reading the boards in my own obnoxious style. If you don't believe me try reading through all the other newbie threads in here or in the business forums. Read the threads about CV's and you will see the same comments there. The sticky about how to search will give you the best way to search the forums.

You tend to be only as good as your last gig. You have to get your head around how agents work. They don't know the technology and are not head hunters. They are people on comission that work quickly either by keyword searching or by reading quickly through your CV to see if it meets the criteria of the gig. They do not have time/knowledge or inclination to bother finding out if you are the man, they will look at your last few roles and make a decision there and then. They will have 20 CV's minimum in the first hour. They don't need to trawl your CV to see if you are the man. The next guy will have the skills in his last job so they will pick him. The fact you did a bit of this a few years ago is no good. Would you employ a builder to do an extension that might have dabbled in extensions a couple of years ago or a guy that can show you his last build?

I am sure you will be surprised how you can tailor your CV to look more specialised in some areas by dropping the stuff that isn't being asked for in the job ad.

Again, exams don't really mean anything unless you can demonstrate your skills very recently. Don't do any harm but it has to be backed up with application.

You are a business now, selling a skill to a market. Not a permie that is an asset to a company. Apart from some differences in niche skills I don't think my approach will be any different to yours. Clients don't pay upwards of £400 a day for someone that can help a bit or will be good when they get up to speed.

Think of yourself as a business and how you compare to other business selling skills. Would you take on a consultancy based on your thinking of how you will operate? What would you expect from them? Why would a client expect any less from you. Might be a bit anal but if you can get in a business mind set you will be better off in the long run. You will have to remember what is business money and what is your money going forward now so might as well start off properly. If you think any other way you are going to look like a disguised employee... You have read up on IR35 haven't you?

dugganator
14th September 2012, 15:42
snip

I'm not doubting your advice. Better to hear from someone in the know then myself.

I just feel confident in the fields that im applying for. I do understand your point about agents on commission who don't have a clue about the job or what any of our qualification mean. One of the people I had call me today saying how they had there best development job and my java skills were exactly what they wanted was funny as my cv doesnt list java on it or that im a developer of any kind lol when I told them this they either hung up on me or the line went dead :suicide:

I think your best bit of advice is getting that business frame of mind in place. IR35 is something I have read and understood but clearly my way of thinking is as an employee so thanks for pointing that out to me.

northernladuk
14th September 2012, 16:01
I'm not doubting your advice. Better to hear from someone in the know then myself.

I just feel confident in the fields that im applying for. I do understand your point about agents on commission who don't have a clue about the job or what any of our qualification mean. One of the people I had call me today saying how they had there best development job and my java skills were exactly what they wanted was funny as my cv doesnt list java on it or that im a developer of any kind lol when I told them this they either hung up on me or the line went dead :suicide:

I think your best bit of advice is getting that business frame of mind in place. IR35 is something I have read and understood but clearly my way of thinking is as an employee so thanks for pointing that out to me.

Have a read of the 2 references sticky in the business section. It will give you an idea of some of the games agents play. Everything you can possibly think of and everything you haven't thought of has been discussed on here so use the google search method described in the sticky at the top. Stick things in like 'Contract review' to find out what to do when you get offered a contract or 'negotiation' to read the threads about how people negotiated etc.