Bakerman

Yo, having been a permenant IT employee for 10 years I am tempted by the contract market (still only 35yrs old). The roles I am looking at are central london and are described as 'developer' and 'designer' - my current job title is 'senior analyst programmer' working on a mainframe using COBOL, the current job is really easy with flexible hours so leave work most days around 3pm.
All the roles are described with pay at the market rate. Any ideas of what that market rate is and what should I ask for ? From my initial googles I reckon a minimum of £1500 per week sounds OK for a basic 37hr week plus overtime and callout as appropriate. I know diddly about the whole IR35/tax thing so would need to learn quite quickly.

Anybody taken this path and have any advice - am I nuts chasing the dollar and upsetting a very cushy lifestyle, it is only money after all ?? Thanks

KiwiGTI

I think you'll need to factor in more working hours than that. While some contractors have it cushy, many don't and are expected to work hard and deliver. Much more than their permanent counterparts.
You probably won't get any overtime at all because you'll be on a day rate and you won't get any sick days, holidays etc so factor those in. Plus there is a high chance you'll lose all flexibility you have at the moment in your job.

And would you be prepared to give it all up for a job that may only last 3 months, then you have top spend a month looking for a new contract?

TopBanana

Yeah, mug's game eh Kiwi

sbk1972

Ive been contracting for 10 years now, 7 of those in the city, trade floors etc.

First thing, mainframe / COBOL ? Mmm think you've missed the boat there a bit matey. During Y2K these skills were in demand and grossing over £3K a week for legacy systems.

Second, contracting is a way of life. Once thing Ive noticed with all the contractors Ive worked with, is that killer instinct, for money, hours and `milking the cow`. We dont do it for cushy lifes, 37.5 hours, we try and work as many hours as possible, squeezing every £££ we can.

Also, depending were you work, contractors are treated very well or very badly. Some places hate you, give you the dead hours, rubbish jobs, whilst listening to **** permys telling you "F**king contractors, just out for the money", whilst you do all the work.

The way I see it, prepare your cv, send it to many of the IT recruitment agencies on the net and see what comes from it. Ok, you may just get a 3 month contract, but if any good your normally extended.

SBK

PeteBrant

THe contract market has really picked up in the last few weeks - compared to the slump around Christmas/new year.

Typical daily rates for developers (depending on skill set) range from £250 to anything up to £700 per day depending on what sector you work in.

Overtime isn't typical in the city, you work your 37.5 hours per week and that's it. Obviously a company pension/holiday pay/sick pay and other company benefits are not given.

It;s a trade off. And you need to discliplined with the money you earn in case yo uhave a lean period for a month or two.

However, it is quite feasible to earn £10K per month as a developer.

Obviously you will need to set up your own comapny, and you may need to take out personal liability insurance..

Lots of info here..

IT Contractor - IR35, PAYE Umbrella Company, Personal Service Company, IT Contracts, Insurance, Mortgage Portal

KiwiGTI

As the next poster said, you either have the mentality or you don't. Many permies don't especially having been in the same job 10 years, it would be a shick to the system.

Plus whenever the contract market picks up you always see them coming out of the woodwork.

sbk1972

Setting up your own company you will need employers insurance (legal requirement) and professional Liability. The later one seems to be a hot subject now and recruitment coompanies are asking me if I have it and have a minium of £1M cover.

IR35 is a difficult little thing. I opted out. The subject alone is too big to discuss here but on the whole is about how you see yourself. Are you a small independant company or someone that works as an employee for others ?

Contracting has many asvantages, many disadvantages, but on the whole is a better way of life. There isnt a job for life now, so in the old days, starting at the bottom, working your way up to director in a company is near on impossbile. Out sourcing, merging of companies, redundancies, a permies life is just as iffy as a contractors.

SBK

Bakerman

Cheers folks, I moved into IT internally working for a life office and therefore have stayed since as it is cushy and pays OK (enables me to do what I want anyway).
Having looked into it last week I have already got some agencies having lined up interviews, for some reason there seems to be some demand at the moment for COBOL on Tandem (don't ask me why, I was suprised as anybody as I always regarded it as dying fast). All three are 37.5 hr weeks. FYI I didnt choose COBOL, I just ended up doing it ............

"There isnt a job for life now, so in the old days, starting at the bottom, working your way up to director in a company is near on impossbile. Out sourcing, merging of companies, redundancies, a permies life is just as iffy as a contractors"

- I work for an IT company that tupe'd me across from the life office and to be frank the security here is no more than 6months anyway, the three opportunities of interest are all 6month initials with intentions of renew (obviously if any good). I always intended working for the life office for ever working my way up but as said it ain't happening in the current world. My permenant contract is only put back 6 months at a time every 6 months and it is only a short time until the final salary pension scheme winds up so as far as I see it i wouldn't be a lot worse off (other than the 6hrs a day I currently do!!).

sbk1972

Yuo have nothing to loose, so go for some interviews, get yourself a contract, create a company and give it a try. The first contract is always a learning curve, as is starting your company, becoming VAT Registered and learning how to do your accounts / invoices /etc.

One thing Ive learnt about contracting is that you cant know everything, but never admit to not knowing, as you are an insurance policy. You've got to become self reliant, so have the ability to pick things up quickly, learn new areas / subjects and give an air of confidence. The monent you start asking your permy colleagues about how to do things, is the moment they start stabbing you in the back.

When I first started, it was handy having friends in certain IT skills / areas to ring up and ask questions. The internet now helps and there's nothing you cant find, learn from that.

Contracting is just as much learning to deal with people, as it is with implementing IT skills. Never flash the cash, never big yourself up and try to become one with your environment. I find that I change to suit my environment, from a laddy loud office, to a quiet professional consultancy, you need to adapt, as being a team player is very important.

SBK

Bakerman

and if your contract is 37.5 hours do you really just do your 7.5 hours per day and clear off ? I would have about 90mins commute so clearly being able to restrict my hours to a fixed amount would help the over all out of the house time.

Hanley

Very good advice

Jerome

Most contractors I've ever known do their exact hours. I do some extra hours but I'm regarded as a permie anyway (go on training courses, conference etc).

You also don't have to have a limited company. You can also have a managed limited company (Giant) or an umbrella company (Parasol).

Bear in mind, as well as what others have said, that you normally don't get any training or career progression. Cobol will become less popular eventually and you'll need to consider training yourself up in something new. Classic ASP rates are on the rise at the moment because no-one wants to do it when they are doing ASP.NET. Eventually though, classic ASP contracts will becomme very hard to find and classic developers will need to cross train to .NET.

Hanley

I think you'll find that, due to legislation changes which come into affect 5th April 2007, umbrella companies are a thing of the past.

Even companies like Giant require you to now form and run a Ltd company, you also need to operate your own business bank account.

All of the above is, of course, assuming you're trying to maximize your income and avoid paying huge amounts of tax.

sbk1972

37.5 hours, well, this is where you need to decide if you go for daily rates or hourly. Daily rates mean in for 9, leave dead on 17:00, hourly mean you get in at 7am, leave at 19:00 :-)

Hourly rates are good, if you want to make up for bank holidays, as you try and stay behind clocking up the sneaky hours here and there, short lunches etc etc. Daily rates are good is you like long lunch breaks, but dont mind loosing on the bank holidays etc.

Each way has its pro's / cons. Ive been on hourly, daily and weekly rates, and am currently on daily.


The name of the game is to do as many hours as possible, if its avialable, as you've got to `Make hay whilst the sun shines`. I get up at 5am, in for 7am, leave at 19:00, as I get paid a daily rate for my 7.5 hours, and pro rota extra overtime hours for hours after 15:30.

Some places dont do overtime, and operate shifts to cover the hours. My current place does. week time overtime is pro rota, aka day rate /7.5 = per hour. Weekends are different, sat I get x 1.5 and sundays I get x 2.

However, becareful how an agency sells the contract to you. For example, I worked in Goldman Sachs, was told that my hours would be 7.5 per a day, and a daily rate was worked out. When I started, I was told my day would be from 8am to 6pm, 10 hours aday. So, my daily rate wasnt too good.

My first contract was a learning curve, on the whole you always get screwed on the first contract.

SBK

Bakerman

I am still chuckling .................. my IT company like you to do what you do and do it well therefore I am expert in COBOL and not a lot else (training budgets went out the window due to lack of profit). Once at a senior development role the next step is project management and I am not interested in that but if pushed I think I could do it. The client site I work on is trying to get off Tandem so the retrain/new language/whatever will need doing within 24months even if I do nothing so I dont think I am losing anything ??

I think I am going to give this a go and goto a couple of interviews, I reckon a commute of max 90mins by train (each way), 7.5 hrs in the office, then job done.

Thanks for helping out and keep 'em coming. You boys who have done this for 10years must have some portfolio built up by now........

J4CKO

iTrader: (1)

I start my first contract on the 16th.

Got sick of being a permie, hanging round with contractors and thinking I could do that, so saw a suitable looking contract, went for it, did 2 interviews and a technical test and got it.

I alrteady have the mentality having hung round with a gang of contractors so long, like the dog that thinks its human !

I have gone the limited company route.

I am not worrying about not going on courses, as to be honest you learn most stuff on the job or by reading about it or practising at home.

I am quite lucky in the fact that the place where I am going has no incumbent DBA so I will be the only one, what I dont need is a f*ckin ninja permie with a big mortgage, even bigger chip and point to make.

Cramming like mad at the moment, I want to warrant the money I get paid unlike some contractors who come and go like the cat, read the paper, do f*ck all and still expect 2 grand a week.

Bakerman

j4cko, know what you mean - I work with contractors daily and to be frank most haven't a blimin clue about their subject (life assurance) and aint that sharp technically and I have forever been thinking "i can do that sooo much better". I could be wrong but the time has come to give it a whizz so off to some interviews hopefully, still nervous as hell and wondering whether I should do it or not but surely it is better to do it and regret than never do it at all ??

I hope you dont mind but depending on how it all goes I may ask a few questions of people nearer the time.

Thanks

sbk1972

Like permies, you get good and bad contractors. After 10 years, and lots of different jopbs, positions, you become a jack of all trades. In one contract, you concerntrate on one area, the next one a different area, so you need to try and keep a note book, or a spreadsheet with lots of worksheets, noting all the commands, tips that you pick up. Ive been doing this since day one and have a spreadsheet with over 20 worksheets containing tips, tricks, commands, it help me in many different situations.

You see, in a permy job, after a while, you learn your job inside and out. IT doesnt really change much, and it becomes second nature. Therefore, any contractor that comes in, isnt going to know your job as good as you. But, the way he adapts, learns quickly and can do it, shows that contracting is about getting up to speed, learning the job quickly and adding some value.

More and more its your experiences learnt in previous contracts, other organisations ways of doing things, that is used. Rebooting a server is the same in every job, but its how the storage / veritas is configured to sort one problem in a previous contract, might help develop where you are now.

Never worry about not knowing everything, its impossible to know everything, in all areas. Whats important is that you be of use, help out and develop current systems.

One thing I stress, and its obvious from your own statements, is that all permies look at contractors as over paid w4nkers, that do a job that they can do. So, when going on site, learn who the main guys are and try to get on with them. For the first 2 weeks of any contract, I learn who's the head dog, who's the mouthy guy, who's the negative guy, who's the guy that steals your ideas, who's the technical whiz. Suss the place out first before you become you. I own several cars, a house with an indoor pool, etc etc, but I turn up to work in an old pajero, never tell anyone about what I have, etc etc. At the end of the day, no matter how good you are, jealous will always creep in.

So, I always protrait an image of poverty, that i need ot contract to pay depts, make out im on a crap rate, as once someone feels your in a worse situation than him, they tend to look at you differently and not as competition.

Like I said, contracting is all about the people you work with, and how you play them, as much as how you fix the systems.

SBK

Hanley

Amen father!!

J4CKO

iTrader: (1)

SBK, that sounds very true.

None of he ones I know ever crow about how much they make, they generally drive modest cars (just plain crap in some instances) but are stacking thousands away and have nice houses and holidays.

Its hard for a perm not to get jealous of a Skyline owning Contractor throwing money about !

Hanley

Just received the following communication from Giant


Giant withdraws from the PSC market to save contractors from financial ruin.

Summary
As a company owned and operated by qualified accountants, giant began providing personal service company (PSC) services in 1992, and since the draft MSC legislation in December 2006 we have spent considerable time and money on professional advice as well as the design and build of a new PSC support system.

Despite this long history and significant investment in PSC services giant is announcing it’s withdrawal from the PSC market altogether and will now not be offering the giant trailblazer service. Instead, giant will be focussing on providing its award winning umbrella service giant strongbox as well as outsourced payroll solutions for agencies and others.

Last Thursday the Finance Bill 2007, Regulatory Impact Assessment and, in particular, the Guidance Notes were published which completely changed the original draft legislation regarding MSC’s. Following it’s publication we consulted with our advisors, Baker & McKenzie, KPMG, and Deloitte, and we have taken a leading tax barrister’s advice, and this has prompted our current action.

Our advisors conclusion is that contractors that do business with PSC service providers face financial and reputational ruin, even bankruptcy, both at a corporate and personal level (and they expose other associated parties, eg. directors, shareholders etc, to personal financial risk) even if their service provider is an accountant.

HMRC have made it clear that they will target all PSC service providers and related parties under the debt transfer provisions, which makes for significant and unacceptable risk e.g. A £50,000 contractor operating via a PSC will save approximately £10,000 in tax and NI per annum. This is how much each PSC will owe per annum and the director and associates will be liable for it all. Plus interest!

The only safe operating model will be through a quality umbrella service like giant strongbox. All contractors who have purchased their limited company from giant and begun the move to giant trailblazer, who wish to switch to giant strongbox, can transfer the company back to giant in return for a full refund.

Those contractors who wish to take the unacceptably high level of risk associated with a PSC are free to deregister from giant trailblazer and seek a service provider who is willing to let the contractor take all the risk and face financial ruin. We will not do this.

The detail
Our advisors have been communicating directly with the Treasury and the Director General of HMRC. It has been made very clear that PSC service providers will not exist under any guise within this legislation, and that HMRC will target all PSC’s.

The Treasury and HMRC are determined to drive such companies out of business and pursue all related 3rd party corporates and individuals for the tax and NI debts due. Under the 3rd party debt legislation HMRC are free to financially pursue any of the following persons, at their sole discretion:
• PSC, the contractor, its directors, secretary, shareholders, other associates
• Service provider
• Agency and end client (delayed until January 2008)
• Directors, secretary, shareholders, other associates of the service provider, agency and end client.

The contractor and its associates face personal financial ruin.

Legislation
The legislation now defines an MSC provider so widely that effectively, anyone ‘promoting or facilitating’ a PSC is caught. The Guidance Note (clause 24) makes it clear that accountants and/or companies’ regulated by an accountancy body are not exempt from the legislation if they are also involved in ‘promoting and facilitating’ PSC’s.

Given the speed and tenacity of the Treasury in implementing this anti avoidance and 3rd party debt (corporate and personal) legislation, does anyone seriously believe that an accountancy ‘badge’, will suffice to avoid it, and it is business as usual?

Hence, all service providers in this market place, regardless of whether they are regulated by an accountancy body or not, are caught by the legislation. HMRC can simply target each PSC service provider and all their respective PSC’s will be caught.

Extract from HMRC Guidance Note clause 24: The term: “in a professional capacity”, means that professionally qualified persons [accountants] normally would not be considered to be an MSC provider except to the extent that they are in the business of promoting and facilitating the use of companies to provide the services of individuals [PSC’s].

Our view in brief
Unlike our competitors we are not prepared to put our clients, both contractors and agencies (and their directors, shadow directors, shareholders and other associates), in financial jeopardy.

Therefore giant will not be providing PSC services (giant trailblazer) in the future since there is now only one option (apart from agency PAYE) in which contractors can trade going forward and that is with a quality umbrella solution where they can continue to offset business expenses. In this respect we will continue to invest in our award winning umbrella service, giant strongbox.

All current giant managed limited company contractors will be moved to giant strongbox on the 6th April. This involves no work for you the contractor or your agency.

For further information, contact your CSM


I've just registered my new Ltd company with Giant, I'll have to find someone else to do my accounts etc

Bakerman

Thanks and what you say makes a load of sense, I didn't mean to tar all contractors the same but you have to admit there are some overpaid incompetant ones .................. just like some permies. It does frustrate more with the highly paid ones though. The ones that are good (and I have come across them before) are given the utmost respect irrespective of their financial reward purely based on their ability.

TopBanana

It's solely the responsibility of the person who interviewed them!

GaryK

Hanley,

I'm with Brookson and they are doing both (at a cost of course). In fact they simplified the whole transition process including setting up a business bank account in the name of the PSC, just sent me a load of forms that I just signed and sent back. So no real change for me, they'll pay me like usual and take care of the accounting side of things.

Gary

J4CKO

iTrader: (1)

I am with OrangeGenie, not had anything like that from them, its typical that I would get my first contract just as Gordon ruins it !

sbk1972

Gents, I started off as a permy. I planned to work my way up in a particular bank, but one day, a unix contractor who was on a good £2K a week turned to me and asked "Whats is nfs ???? " :-) Talking to my line manager, about this and my possible career progression, I realised that I would never beat the contractors, so might as well join them, that was 10 years ago and Ive never looked back.

I have my own ltd company. Umbrella companies were good if you werent going to contract long, were from abroad working here, but now Gordon Brown has pulled the lopp holes on them. So, the best things is to create your own company and take charge of your accounts, dividends, vat, payroll etc. It isnt such a big deal. In the first year you soon long to pick these up.

In the contract world, you will always hear about guys earning more, on better rates, if you start worrying about this then you will never be happy. You have to work out what is a good rate for you. Always make sure overtime rates, bank holiday rates have been worked out, and try to make sure your contract is IR35 happy, well as best you can.

Today, in this budget tight, out sourcing, quick deadline IT world, contractors costs are quick to get rid of in the event of mergers, porojects that get canned etc. Permy staff now are so intuned with their rights, redundancy rights and other things that more and more projects take on contractors. Infact my g/f company are making permies redundant due to cutting costs, but contractors at her site are on a different budget and arent effected.

Yes, there are good and bad ones, part of life. At the end of the day we all work for money, and the boom / bust market has a way of killing off the crap contractors, so let them worry about that.


To all contractors, new and old, you must join the PGC, Professional Contractors Group. The £100+ a year provides IR35 insurance cover which helps if you are investigated.

SBK

J4CKO

iTrader: (1)

SBK, you are an inspiration, I would start contracting if I hadn't already !

sbk1972

Jacko, I tip my cap towards you sir :-)

SBK

TopBanana

FFS get a room!

carl

Close. If you want the insurance cover you have to have PCGPlus membership which is circa £200+VAT.