Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.
Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.
Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.
The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]
As the ripples of the recession continue to bite and many IT professionals suddenly find themselves at home living on a regular diet of daytime TV and microwave pizzas, the age old argument of Contracting vs. Permanent comes back to the fore. If you have always been a permanent member of staff, then you probably look at contractors with a certain amount of disdain.
For you, contractors are the ones in flashy suits, who waltz in at 10am, make loud noises about their superior knowledge, and even worse, boast about their large house, or fancy sports car, or daily rate, or even all three.
They go home the moment the clock strikes 5pm (or 4:30pm if they can get away with it), and worst of all, they never buy the drinks when it's their round down the pub.
Permanent staff are the foundation pillars of an IT organisation, by investing in them in the long term, you build up a vast embedded knowledge base of your organisations IT infrastructure, something which no contractor, no matter how skilled, can match.
A contractor is the ideal resource to allocate to upcoming projects. They should be the IT equivalent of Instant Coffee: Quickly Obtained, Hot (on their subject matter), Ready to Use, and disposed of easily. Find out how to start contracting.
However, a contractor is only as good as his or her last contract and they have to up-sell themselves for each new assignment every six months or so."
From an employer's point of view, you need to find the right peg for the right hole. The cocky contractor may be the right person for you.
Think about how you want to use this resource. For most projects you need a strong IT design that will stand up to being dissected by your existing departments and this is where the contractor's strong personality will work for you.
Each type of employment has its pro's and con's, and you should weigh carefully whether switching is right for you, if you make the wrong choice, your once enjoyable career, can suddenly make you very miserable.
One problem you won't have as a contractor is paperwork and admin. The umbrella company service is designed around the back-office needs of contractors.
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It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.
Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].
Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.