Posted By PL Hi, I've been made an offer to go "contract" on a long term basis. I've always been a salary slave, "working for the man" before. I guess I would kiss bye-bye to pension plans, BUPA, etc. Is there anything I've missed that will have to come out of my own pocket? Also, I'd welcome any hints, tips or experiences from those that have travelled this path before? Thanks in advance

Posted By Chris Packham Agree with Merv. Also remember that up to now others have been doing much of the administrative work for you. Going contract will mean that you will be doing all the administration, ensuring that you have the necessary equipment, office supplies, etc., arranging for your car to be serviced (and paying for it) and above all chasing the money. This will all take time, during which you cannot be working at your main job (unless like me you are lucky, you have a wife who can do this for you!) You will need to take this into account when working out what you will need to charge. Many new businesses fail because although the person is an expert at his work, he does not get the administration properly done and, in particular, fails to ensure payments come in on time. Chris

Posted By Darby Allan Don't forget that you are not allowed to be sick! Holidays can be difficult and be realistic on the days that you can actually work. Base your fee on working around 180 days maximum., everything else is a bonus. Ascertain whether you can do other work, because if you only work for one client then it is often viewed as employment and taxed accordingly. Think about sole trader or limited company (both have advantages dependant on circumstances (local business link or similar can advise)) Other costs - accountant/car/phone plus there is a lack of security. Is your post being made redundant? If so you have entitlements there too - worth checking. Saying that - it would appear that you at least have some income guaranteed whilst you look for other opportunities and there are lots of independants out there making a good living. Darby

Posted By MickN I'm, frankly, a bit amazed by the negative reaction here towards the possibility of "going contract". If I can I'd like to try and redress the balance and let me first point out that I'm over five years as a "contractor" in Ireland. Number 1: You will earn more money. This is not in question and if you are able to secure a position where you have a rate of 40GBP/hr this will be more than adequate. Consider a 40hr week for 47 weeks (5 weeks hols)and you have your yearly profit. From this you pay yourself a wage, you are still PAYE only now it's your responsibility to square it all off with the taxman. Number 2: Sole Trader v Limited Company. In Ireland, due to legislative changes, almost everyone was forced into becoming limited Companies. This was due to the fact that you had the same rights as all the other employees (like redundancy) at a company. In reality, there's not much difference between the two but I would go "Ltd" if you ask me. Number 3: BUPA, etc.? Well you are now your own employer and you can provide yourself this cover. You may have to pay BIK but talk to your accountant. Number 4: Your accountant. Get one, it'll save you alot of hassle in the long run. Yes they are expensive (over 1,000GBP, I'd guess) but you'll reap the benefits and your increase in pay more than covers this. Even if you decide not to go with the contract thing, talk it through with an accountant, that way it's not just some bloke on a forum giving you dodgy advice. Number 5: Going contract means that you are always watching the door. Always wondering when you'll need to move on. Your contract should have a notice period on it (for you and your company) which would normally be 4 weeks. This gives you time to find your next post. I would finally like to say that my experience comes from the construction industry. I think construction work suits the contract game due to the nature of projects starting and ending all the time. Permanent positions have their advantages and pensions are something to think long and hard about but then the stock market boys are blowing those to hell too. Mick

Posted By PL And Chris, Admin???? Car serviced??? I've done my own admin for years and don't have a company car... These are part of the reason I'm looking to move on anyway. Thanks :)

Posted By Guderian Forgot to add - and as I put in my first post - your contract will be with the agency NOT the company you are actually working for. Do not be so blinkered as to think the company you are actually working for 'will see you right'/guarantee you work etc - you are entering into a commercial contract, if it goes pear shaped all that matters is the terms of the contract with the agency. I would suggest you make contact with as many agencies as you can, so if one runs out of work for you, you can then hopefully pick up work via other agencies and eventually build a network of contacts. Don't put all your eggs in one basket and don't trust agencies too far or word of mouth promises by anyone. The financial rewards are there and it can be worth the risk, just don't be blinkered.

Posted By GeoffB4 I personally think there have been a lot of positive responses to the question raised. Health has been mentioned just once but it is very important. If you are ill you don't earn, and you must take that into account.

Posted By naveen duggal Hi, I do agree that working on contract especially in construction company ,petro-chemical field, there are advantages & disadvantages....to a certain extent. Risk taking with awareness of the terms & conditions of the contract, status,allowances,car,house allowenses & family benefits are some of the factors to be examined before accepting a contract. However,the employers reputation ,financial standing, in the market and its progressive legacy,its Team players are to be known. Self assessment & updating your skills is essential to review from time to time. Your liking the job in early ages is good,for you can easily change or adjust to its team, its environment and your interest (Goal), what you wish to achieve at the end of this contract,both financially,professionally and from health point of view ? Later ages, changing jobs are not so easy, due to market demands, competition,age,cheaper wage young skilled entrants availability. So assess the contract, evaluate your suitability , capability, ability and other options (choices), plan before undertaking a long term contract or accepting a short term contracts depending upon its boon to improve your capabilities and move upwards along the market growth & demands If you feel good about it,OK then Go ahead.. "Think twice before YOU Act" Then is it upto YOU to decide for long term contracts, what do you want? And if the company fails to meet the contract requirements or is closed suddenly,what do you do ? or changes its ownership who make your job redundant? Do you have any alternatives or choice as you may not be able to accept the sudden change? You have come to the end ,waiting what to do next, like waiting at the Bus -stop and no Bus to arrive (Job FREEZE)....or retire! Best of luck, Naveen Duggal

Posted By James M Interesting comments so far. Illness is one of the factors I considered but have not been sick for most of my working life (touch wood) so wasn't an issue for me. However I pay £450 a year for PI insurance and this includes sickness insurance at £500 a week after 4 weeks sick. I bit more than statutory sick pay. As for how much you can earn, I tend to work on the theory high risk- high reward. In Nuclear, O&G etc you can earn up to £900 a day but more likely to be around the £500- £600 mark. In construction around £250-£400 per day. Rail and energy sector just a bit more than construction about £300-£500. Regions do vary as well. As already stated this depends on your experience and qualifications. Also the client and what they stipulate. You can have part of the interest from your mortgage paid by your company, get fuel at 40p a mile, buy computers for your work and other goodies such as mobile phones etc etc. Let's take an average day rate of £350 and work 20 days a month for 10 months = £70,000. This taken into account my normal expenses would pocket me about £58k per year. An an employee the best H&S job I have seen advertised has been about £80k. This would give you take home of £53k. Considering the role would be a board director and dealing with all the politics and bean counters I believe the contractor role wins hands down. A low risk pension where you pay in £60 per week gets a top up from the tax man at £40. At the end of the day it is up to individuals what they want. Security and pay lots of tax or weekly contract and take home the vast majority of what you earn. I have been happy being a contractor (working outside IR 35) for the last 6 years.

Posted By PL Thanks guys, A lot of positives and some negatives. I've weighed things up and I guess now is the time to take the plunge. Nearly £30 an hour is below the suggested for top tier COMAH, but it's a guaranteed 37.5 hour week and a minimum 12 month contract. I guess that's almost like a salary? Health wise, I've been OK, but like life there's no guarantees. Your suggestions have been great, the PI insurance, health insurance, etc. sound excellent and I'll be following up on them before starting. Now I guess I have to write that resignation letter ;)

Posted By kaggs A question on contract work to the people who have did it before even although I will talk to an accountant later: Let's assume that you have been contracted (via an agency) for a 12 month contract at an hourly rate. At the end of each month (for easy talking) the agency have paid your own limited company £5k plus the VAT on top. Out of that £5k you decide that you only need £3k and pay your motor costs at the 40p per mile and all other expenses seperately out of the limited company thus keeping any other money for a rainy day in the Ltd company bank account. On top of that you have paid yourself via PAYE and paid employer's and employee's NI contributions. To make matters a bit more confusing you have did some other projects for clients which are clearly outwith IR 35 but not many. Can you: 1. Pay yourself a dividend at all despite IR 35 from the profits at some point in time from the profits? 2. Or, does this mean that the full £5k payment (from the agency) is subject to PAYE & NI contributions etc BEFORE you pay all relative costs? Confused. 2.

Posted By kaggs Thanks for the reply but can you pay yourself dividends at all? Bear in mind that a portion of this income (in the hypothetical sitaution above) has very clearly been generated outwith IR 35?

Posted By PL Cheers Guderian, Believe me, it's a step up on my current salary, a hefty step up. And I've been UK SHE advisor for a multinational top tier COMAH site for the last 5 years. Occasionally I see jobs advertised for the rates you mention, but only occasionally. I'm registered with all of the big agencies, check SHP and the job sites... Just because some large headline salaries are advertised, doesn't mean that we're all on them :( however good luck to those that are... Fingers crossed one day...

Posted By Ian G Hutchings Hi All I can say is speak with a good chartered accountant. Tax/PAYE etc is a complex area and it is worth getting it right. HMRC can be particularly unforgiving if you owe them money. Dividends can only be paid from profits after all taxes have been accounted for. This can't be done on a forecasted profit across the year. The profit has to be tangible and available after all costs and taxes. If you can't meet these payments you can be seen as having illegally taken money out of the business without paying correct PAYE/NI etc. Just speak with a reputable accountant. They can save you money in the long run. Best of luck Ian

Posted By GeoffB4 Quote: The tax man is launching a ferocious winter (07/08) offensive against dividend payments, with owner managed businesses in the firing line, warns a specialist adviser. Uur accountant has advised us to not take dividends from this year on, so don't rely on this being a tax reduction device that is automatically or will always be available.