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New Post 2/3/2020 2:53 AM
User is offline mryan10
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Contract BA - Expectation/Tips 

Hello,

I am debating whether to go down the contract route and wondered if anyone can provide any useful tips/what to expect?

Thank you.

 
New Post 2/3/2020 11:30 PM
User is offline Stewart F
96 posts
7th Level Poster


Re: Contract BA - Expectation/Tips 

HI there mryan10,

Can you advise what country you are based in? I am a BA Manager in the UK, so can tell you plenty about contracting in the United Kingdom, but probably wouldn't be your best 'port of call' in the US.

 

 
New Post 2/5/2020 7:07 AM
User is offline mryan10
2 posts
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Re: Contract BA - Expectation/Tips 

Hi Stewart,

I am based in the UK - looking to move into London.

Max

 

 
New Post 2/10/2020 1:31 AM
User is offline Stewart F
96 posts
7th Level Poster


Re: Contract BA - Expectation/Tips 
Modified By Stewart F  on 2/14/2020 2:14:06 AM)

HI mryan10, 

If you are from the UK, then I am your man to advise! So a bit of background. I am a BA Manager, currently a Perm employee, but use to be a Contractor with them. I had been a contractor for over 10 years. But this offer was too good to turn down. 

So, lets give you some tips about being a UK contractor. Where do you start, Ok, first things first. Do some reading before you set yourself up. Use an Internet Search Engine for Contractor UK forum. It has tons of really useful advice on starting up, and those silly questions that you need to know, but are a little bit shy to ask. So read that first. 

You may have seen that there has recently been a change in the way Contractors are handled by MHRC. IT use to be that Contractors had to prove they were working outside of IR35, now they don't have to as much. Its up to the employees (those who hire you). What is IR35 I hear you say? Well, in short, it is how HMRC judge you to be working. In effect it basically asks are you an employee of the company, or are you an employee of your own company. The first is inside IR35, the second is outside. 

To be a contractor in the UK, you need to start up your own Ltd Company. You can do this via what is called an Umbrella Company (Its where you don't actually set it up, someone else does and you pay them a fee) However, be warned - HMRC are chasing this aggressively. My advice is to stay away from them 

Things you will need to start off with:

1. An Accountant - don't do this yourself, its a nightmare. Get a proper Accountant. It can be a small local high street one, or a specialist firm. Its up to you. This is important, so give me a shout if you need an specific questions about this answered. 

2. Your accountant may be able to help you set up your company. If not, its not that hard, but you need to know where to go. HMRC and .Gov websites will tell you all you need to know. Again, ask if you have any specific questions.

3. A Business Bank - Try to get one that does not charge fees. These wont seem a lot to start off with, but they do add up. Main streets banks - Barclays, Lloyds, Nat West etc, tend to charge a lot, even for a statement of your account. Other banks may not. You can join anyone you like,  Don't get press ganged into joining one you don't want to be with. 

Next, you need to be aware that as a Director of a Ltd Company, there will be weekends when you have to do a lot of paperwork. In the UK, as a Contractor using a Ltd Company, you will pay Income Tax (no getting away from that Im afraid), Corporation Tax and VAT on all money that you earn. Don't worry, with a good accountant you can claim back a fair chunk. So even going down this route , you will still make more money. 

There are lots of contract roles around the country, and if you become a favoured know resource with other companies, you will get asked for a repeat contract quite often. Depending on what area you work in, you will make around £400 a day contracting. In London, that may go up to £450 or £500 a day. It depends what sector you work in. But the good thing is that there are lots of contracts out there. 

To start the ball rolling be prepared to accept a contract, what ever the rate. It gets you known. Typically contract roles are found on the usual job websites:- CWJobs, LinkedIn, JobSearch etc. You will more often than not still have to go through agencies. Be warned, that you may have to apply for multiple roles before you get one. As a Contractor, you become very good at interviews!

Be aware as well that you can get a contract role anywhere in the UK or abroad. It isn't just restricted to London, and don't assume that you only make money in London. There are other travel costs to consider. 

So my tips would be:

1. See ContractorUK to get tips with how to set yourself up (or ask me).

2. Set yourself up to be ready to work - you need to do this first before you start looking for contracts and it can take a couple of months.  

3. Get yourself an Accountant.

4. When you do all the above and start work, keep all receipts, tickets anything that you pay for stuff related to that work. For example I bought myself a new laptop to work on contracts and recovered the VAT element. It saves you money in the long run. 

5. Be prepared to do some work at home running your books and company. This is especially true for your self assessment, and Corporation Tax. 

6. Make sure you can regularly talk/contact your accountant. You need to pay VAT etc every quarter. 

7. Do pay into a private pension plan - set one up if you don't already have one. 

Lastly, most, but certainly not all Contracts last for 6 months. So once you get the role, in the last month, ask if there is any chance of an extension. Whatever their answer, start applying for other roles - you can turn down a role if offered, but you cant if you haven't applied. It takes roughly a month for a new role to start - whatever the advert says about starting tomorrow, it will still take roughly a month to start.

Give me a shout if you need clarification on anything.   

Note: Just looked at my reply and realised that I forgot to put he website address in. The forum is called Contractor UK and can be found at https://www.contractoruk.com/. I'm not associated with this site by the way, I just happened to use it myself when I first started up. There is a whole section about starting up and what to do, plus loads of Q & As etc.

Please note that this relates to UK contractors only. I believe that US contractors have different rules associated with them which I am not familiar with. 

 
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