IT Contract Advice

[KingJeff 4th]

Hi Guys

Theres been a couple of threads on this over the years, but just had a few questions that werent quite answered by them.

Im looking at contracting as a new step in my career, and i have found a few that i have now applied for.

I think im going to go down the umbrella company route to 'get my feet wet' rather than anything else yet. I dont mind paying a small fee for someone to look after it properly!

Anyway, on some of the website i have looked at, it mentions you only get paid when cleared funds are recieved after your unbrella company has invoiced the client.

My small knowledge of invoicing is that there is normally a 30 day period for them to pay it. There for would i work a month, umbrella invoices, then i get the cash 30 days after that? Essentially 2 months into the contract? Am i getting confused? Do you get paid sooner? What am i missing!?

Any help is appreciated, im keen to get into contracting, but dont want the paperwork / admin side to put me off because i dont understand it!

Anyone got any advice / recommendations on decent umbrella companies to use?

Thanks in advance!

[mad_matt]

All depends on the agency you use, some of the big guys, computer futures etc will put you in touch with a decent umbrella setup, from my experience you usually get paid very quickly as the umbrella company takes the risk of the invoice, most kiwi's and australians do it this way as it is much easier then setting up your own Ltd...

[Setenza]

I use Parasol IT.

Here's a brief run down of how the whole "pay" thing works.

You take a job and the agent sends Parasol a contract. Alternatively you can work direct to an employer without a agency () and use a generic contract.

Parasol then ask you to verify the contract via their website.

You then submit a timesheet signed by your employer to the agency and submit a similar online one to Parasol. This then generates an invoice that gets faxed/emailed to the agency.

The agency then pays Parsol who then do the tax and NI deductions and pay you. The agency then recoups it's money direct from the employer.

I submitted an online timesheet to Parasol and an physical time sheet to the agency last Wednesday for a job I was doing. The agency then ran its pay run on the Thursday.

The money was with Parasol on Tuesday this week. They then ran their pay run and the funds hit my account today. So I work approximately a week and a half in hand, so to speak.

You can also claim a daily subsistence rate and travel expenses through Parasol which you get as tax relief. You therefore pay less tax and this then covers some of your out goings.

Things to remember if contracting.

1.) Always have a cash float in the bank to cover at least 3 months bills etc.

2.) When between contracts, claim benefit. I claim JSA as a single man. Its doesn't pay much (about £59 per week) but you get your contributions paid and your legally entitled to it.

Yes, it is a bit of a hassle to sign on and then off, but I do it on principle.

3.) Always chase up your agent. Get a contract submitted ASAP. Always check to see that they get your timesheets. Always ask for things like confirmation emails. Don't rely on people doing their job efficiently.

4.) Be prepared to wait for your money sometimes (1 to 2 weeks) as some agencies are slow or have odd pay roll runs.

Hope this helps.

XoD.

[KingJeff 4th]

Brilliant guys thank you both for your advice.

I'll be fine with a week or so in hand... my worry was a month or so in hand!

In terms of a life style, how do you guys find it compared to working as a permie? (check me out with the lingo)
I assume credit / mortgages can be a pain? Longer or shorter hours in general?

Do you have any experience of public sector work? One of the contracts im looking at is 3 months with possible extention. Is this the norm?

[eric pisch]

Originally Posted by KingJeff 4th

Brilliant guys thank you both for your advice.

I'll be fine with a week or so in hand... my worry was a month or so in hand!

In terms of a life style, how do you guys find it compared to working as a permie? (check me out with the lingo)
I assume credit / mortgages can be a pain? Longer or shorter hours in general?

Do you have any experience of public sector work? One of the contracts im looking at is 3 months with possible extention. Is this the norm?

public sector has pros and cons, you wont get as much money but you will 100% get paid, the money should be ring fenced when you get an order. (I had a private company go bust 3 weeks after i installed a full it system for 18 grand ...)

I started of on 3 month contracts and im now on 2-3 year contracts for a day or 2 days a week at 3 different sites. If you get into the right places it can be very good, they appreciate that you make the effort all the time (or you don't get a renewal) and that you wont take sick days unless unavoidable (you don't get paid), and i have no problems giving free 24/7 personal support to the important members of staff.

I'm a sole trader, its more hasstle than what your doing but my accountant does most of the work, however the benefits are huge imo. M3/RS4 as a company car, no worries (if you earn enough ofc), income tax whats that NI £6 ppw i think

[mad_matt]

I would give you a word of warning, depending what type of contracting you plan to do it can become incredibly easy to get use to the amount you get paid and start living a life style that is not easy to pay for when you go through a quiet period. Like eric said - put enough away for at least 3 months bills, rent, clothes etc - don't forget every time you take a day off or go on holiday its unpaid!! So a £2000 holiday for 2 weeks actually costs you over £4,000 (depending on your hourly rate )

[andykn]

I was always toild to budget on earning 40 weeks, 200 days in a year.

[DVD-Man]

Originally Posted by Xusia Of Delos

I use Parasol IT.

Here's a brief run down of how the whole "pay" thing works.

You take a job and the agent sends Parasol a contract. Alternatively you can work direct to an employer without a agency () and use a generic contract.

Parasol then ask you to verify the contract via their website.

You then submit a timesheet signed by your employer to the agency and submit a similar online one to Parasol. This then generates an invoice that gets faxed/emailed to the agency.

The agency then pays Parsol who then do the tax and NI deductions and pay you. The agency then recoups it's money direct from the employer.

I submitted an online timesheet to Parasol and an physical time sheet to the agency last Wednesday for a job I was doing. The agency then ran its pay run on the Thursday.

The money was with Parasol on Tuesday this week. They then ran their pay run and the funds hit my account today. So I work approximately a week and a half in hand, so to speak.

You can also claim a daily subsistence rate and travel expenses through Parasol which you get as tax relief. You therefore pay less tax and this then covers some of your out goings.

Things to remember if contracting.

1.) Always have a cash float in the bank to cover at least 3 months bills etc.

2.) When between contracts, claim benefit. I claim JSA as a single man. Its doesn't pay much (about £59 per week) but you get your contributions paid and your legally entitled to it.

Yes, it is a bit of a hassle to sign on and then off, but I do it on principle.

3.) Always chase up your agent. Get a contract submitted ASAP. Always check to see that they get your timesheets. Always ask for things like confirmation emails. Don't rely on people doing their job efficiently.

4.) Be prepared to wait for your money sometimes (1 to 2 weeks) as some agencies are slow or have odd pay roll runs.

Hope this helps.

XoD.

Spot on, Parasol have some nice staff but the onus is on you to keep on top of your admin.

I would recommend Parasol too.

Liam

[eric pisch]

Originally Posted by andykn

I was always toild to budget on earning 40 weeks, 200 days in a year.

sound advice

[cdrider]

Originally Posted by Xusia Of Delos

You then submit a timesheet signed by your employer

Client.

You can also claim a daily subsistence rate and travel expenses through Parasol which you get as tax relief. You therefore pay less tax and this then covers some of your out goings.

Only if you actually incur them. And if the brolly says you don't need to submit receipts you do. Just not to the brolly. Keep all receipts in case HMRC ever want to see them. And make sure you're not claiming Parasol's £15 a day for food and only spending £5. That way lies jail. The brolly may have a dispensation from HMRC, you don't.

1.) Always have a cash float in the bank to cover at least 3 months bills etc.

Yep.

And also have a look at http://www.contractoruk.com/first_timers/index.html and http://www.pcg.org.uk/cms/index.php?...ownload&gid=27