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Sign the contract? Urgent advice needed!

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  • 28-07-2006 2:44pm
    #1
    les_steaks
    Closed Accounts Posts: 108 ✭✭


    Hi, I'm a VB programmer with 5-6 years experience in the Life and Pensions industry. For the past while I've toyed with the idea of contracting.

    I'm in permanent employment earning 43k. I've just been offered a 3-month contract for 320 euro/day. They want me to sign asap so I need to make up my mind. What worries me is that its a short contract, they said there'd be a good cahnce of renewal but of course no guarantees but agency said there's a lot available.

    What would you advise?

    I know nothing about contracting really i.e., tax etc..

    If I register as a sole trader/ limited company how much tax should I put away each month (roughly), 42%?

    What can I claim VAT back against?

    As I said need to make my mind up fairly quick so any advice is much appreciated.

    Cheers,

    Les


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    #2
    Beano
    Closed Accounts Posts: 3,357 ✭✭✭Beano


    If you're thinking of going into contracting get yourself an account. They can answer those tax questions for you. DOnt even consider trying to do all that stuff yourself. They will advise you to go the limited company route. Take their advice.

    Given a daily rate of 320 you should expect to gross somewhere in the mid to late 60's. If you think you're good enough then go for it. Bear in mind its totally different to what you are used to as permanent. You'll be expected to pick things up straight away. Depending on the company it can be very stressful.


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    #3
    cgarvey
    Registered Users Posts: 3,886 ✭✭✭cgarvey


    Get an accountant on board.

    Put away as much tax as you owe (again an accountant would be able to explain this to you and help you budget). It might be an obvious answer, but it's the only one. The income tax works the same when a sole trader as when a PAYE worker (in that it's not all 42%, it's staggered).

    You can claim VAT back against any business-related expense (that you've been charged VAT on).

    Finally, get an accountant on board. By accountant I don't mean paying Pricew Waterhouse Coopers, but the smaller accountants can be very cheap, but invaluable. You can do a lot of the work to reduce their fees as well.

    .cg


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    #4
    DamoKen
    Registered Users Posts: 1,269 ✭✭✭DamoKen


    do you own your own home? just asking as you should be aware that payment protection doesn't cover you if you go contractor. Put me off it, admittedly though the market is a lot better than it was when I was offered it (late 2004).


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    #5
    iascanmore
    Closed Accounts Posts: 79 ✭✭iascanmore


    Les,

    Do not sign that contract today!! Let them wait until Monday - gives you the weekend to think about it and ask me lots of questions.

    I started contracting 12 years ago (VB, SQL, etc etc), I actually went permanent 3 week ago!!!, but there is not a thing I don't know about it. I've had long, short, big, small contracts, ones through agents, direct with clients. Spent exactly 14 months "unemployed" in my 12 years at it. I've earned some serious dosh on some contracts and a pittance on others.

    Your clearly not ready to become a contractor so don't hand in your notice, just yet - 43K is not that bad.

    Rule one - Do not go contracting for the money only - its a lifestyle change aswell.

    Rule two - Agents are scum - apologies to any reading but that's my experiences - here (Dublin), London, Germany & France.
    I like to think of them as several rungs below car sales men, do not believe a word they say.

    Rule three - Read two again!!

    Seriously the hassle your getting is standard practise to a newbie - they want you to sign 'cos they fear another agent (pimp) will nip in and steal your job ...obviously the client wants you so will wait an extra few days until you think about it properly.

    Get a list of questions together and I'll take look over the weekend.

    Iasc


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    #6
    Evil Phil
    Registered Users Posts: 7,468 ✭✭✭Evil Phil


    iascanmore wrote:
    Rule two - Agents are scum - apologies to any reading but that's my experiences - here (Dublin), London, Germany & France.
    I like to think of them as several rungs below car sales men, do not believe a word they say.

    Yep, that's right they are scum. You are a commission and nothing else to them.
    iascanmore wrote:
    Seriously the hassle your getting is standard practise to a newbie - they want you to sign 'cos they fear another agent (pimp) will nip in and steal your job ...obviously the client wants you so will wait an extra few days until you think about it properly.

    This is a very important point. The client is who you will actually be working for day to day. The agent is the person you'll fax your invoice too at the end of the month.


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    #7
    DublinWriter
    Registered Users Posts: 9,557 ✭✭✭DublinWriter


    I've been contracting for the past 8 years and the best advice I could give to you is go into it prepared. Just because someone is making you an offer *right now* is no reason to jump.

    You have to be prepared mentally, financially and have your Ltd. company in place, with full knowledge of your responsibilites regarding PAYI/PRSI, VAT, and all the various annual returns.


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