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Setting up as a IT Contractor

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  • 16-02-2013 2:30am
    #1
    creedo
    Registered Users Posts: 9 ✭


    Hi - does anyone have experience of setting up as a independent contractor? I work in IT and have been offered a contract and in need of advice.


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    #2
    Feelgood
    Registered Users Posts: 2,191 ✭✭✭Feelgood


    Do you mean you have been offered a contract without using a recruitmen agency?.


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    #3
    creedo
    Registered Users Posts: 9 ✭creedo


    Correct Feelgood - I have been offered a 3 month contract directly with a small IT Consultancy. No agency involved....


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    #4
    Feelgood
    Registered Users Posts: 2,191 ✭✭✭Feelgood


    Well if you are sure its only for 3 months and wont get extended, its not worth the hassle setting up a limited company. I'd look at being a sole trader which will allow you to trade under your own name. You will have to register for an individual ABN.

    Then all you have to do is invoice the company under your ABN, gets paid into your bank account and that is it. At the end of the tax year you just submit your tax return with details of all business conducted under your sole trader ABN. I recommended hiring a good tax consultant to help you with this.

    Just remember that all monies coming to you are gross. Make sure to put some money aside for your tax return. Ideally try to calculate your tax roughly each month and stick it in a bank account that is difficult to get at.


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    #5
    creedo
    Registered Users Posts: 9 ✭creedo


    It will probably get extended but after 3 months we will re-enter negotiations on how to move forward, be it a permanent role or extended contract period.

    Setting up as a sole trader does sound the most sensible way forward at this stage. Its been great to get your opinion, so thanks.

    All I need to look into now is Professional Indemnity and Product liability insurance and determine if paying for this privilege is less costly than signing up with an umbrella company..........jury is out on that one!


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