Set up as IT Contractor

allycavs

Hi Guys,

I work in IT for a number of years now. Luckily I have always been employed in a full time position. But working as a contractor always has an allure for me.

Out of interest how can I set up as a contractor and what are the pit falls, for example declaring tax, accountancy fees, closing down the business.. Do i have to set up as Ltd company?

Thanks
Alan

ressem

No, you don't need to set up as a limited company.


You can declare yourself as a self employed contractor to revenue.
Register a business name with the CRO. Use this to set up a bank account
in the name of the business.

Depending on what turnover you have, you may have to register for collecting VAT.
http://www.enterprise-ireland.com/en/Start-a-Business-in-Ireland/Information-store-for-Start-ups/Revenue-Guide-to-Setting-Up-a-Business.pdf


As for your accounts, it depends on how much trade you're doing, and whether you need to make purchases of substantial amounts of equipment and software in advance of your clients paying, or require subcontracting work to other providers.

You'd usually keep lists of...
Payments out
Received Payments in
Purchases on credit
Sales on credit
A bank balance book
A sheet to record travel mileage and subsistence costs
A list of assets (hardware, software licenses, with purchase date)
A list of expected costs (all the recurring bills and their dates)
the invoices that you have issued
the invoices that have received for payment

and you'd be able to put together the income for the year, perhaps without the need for an accountant until turnover increases sufficiently.

Depending on the work type, you might need to consider professional indemnity insurance.

I'd really suggest that you do one of the start your own business courses / books to set up a decent business plan, identify clients, plan revenue for the first 3 years including the hard bit at the start when you have expenses and little income. You have a job so perhaps it's possible to put a toe in the water (programming at weekends?) as you get used to keeping books and clients in order.

http://www.oaktreepress.eu/index.php?page=shop.product_details&flypage=gardenbok_flypage.tpl&product_id=68&category_id=12&option=com_virtuemart&Itemid=2

http://www.selfemployedsupports.ie/

Eoin

Moved from work/jobs - this forum is more suitable

allycavs

Thanks for the adivce Ressem. yes this will be something on the weekends. I was approached to do a couple of small websites and it was hard to refuse. I will take that all on board. Now the one question I have is I have to close down the registered company does that cost alot of money? i was told closing a company downs costs a a little fortune?

Alan

ressem

From the site
http://www.selfemployedsupports.ie/closing_your_business.en.html

Closing down when you are a self-employed sole trader is simple if your assets exceed debts.

If it's a company though you need to put it into voluntary liquidation.

srsly78

Don't bother with hassle of ltd company if it's "just for the weekend". Do bother if you plan on doing it fulltime and sticking with it for a couple of years.

Closing a company down doesn't cost much, paying accountant to make sure all the books are finalised does cost. If you were running a ltd company you would have an accountant anyway tho.

yop

Guys,
Can someone PM me some details of providers they recommend for PI insurance.

Thanks