When You are Offered One IT Contract After Agreeing Another

Offered Two Contracts

What do you do when you have signed one IT contract, and then you are offered another contract? The agency will expect you to take the job and bring up such subjects as morals and honesty.

I would suggest that if there is a notice period in the contract, that you utilise it straight away.

The company may want you to come and work for a month, but I very much doubt it.

Notice Period

In many contracts there is a one week notice period for the first month.

Is it dishonest or immoral to utilise this when offered a better contract?

The Agency wants the right to be able to make hard-nosed business decisions, and the employing company wants the right to be able to make hard-nosed business decisions, but they expect the contractor to make one out of loyalty and ‘not letting them down’.

There is a double standard here.

Double Standard

Even in the situation where the contractor has signed the contract with the agency and the agency with the employer, if the project got canned, or word came from on high that project staff cuts were to be made, there would be no argument about ‘not letting the contractor down’.

The employer would cut him and try to get away with paying the legal minimum, and would try it on first of all to try to get away with not paying him a penny.

Is there anyone who doubts this?

Now, what would the agency do?

Signed Contract

It has a signed contract with the contractor but no job. What do you think that the agency would do?

Would they first of all think of their business obligations to the contractor and ‘not letting HIM down’, or would they go for with the legal minimum, and try to get away with paying nothing?

I don’t think we would have to hold a poll on those questions, so why is it thought to be dishonourable and dishonest for a contractor to change his mind and take a higher paid job BEFORE he has even signed a contract, unlike the case with the other two.

Using Business Judgments when Offered New Contract

Even if he has signed a contract, and it is no longer in his best interests, and there is a notice clause in his contract, then he is quite entitled legally to use it when offered another contract.

As far as the morals of the situation are concerned, one can argue the case, but if he decides to sign the contract for a job that he no longer wants, he’ll find that he is the only one using morals as a criteria rather than just straight business judgment, and business interests.

Why is the contractor ‘not allowed’ to act in his best interests whilst the agency and the hiring company always will?

Individual

It’s because the contractor is seen as an individual rather than a small company, and people expect different moral standards from individuals than they do from a business.

Why that moral ‘pass out’ should be given to people acting on behalf of companies and not for people acting on behalf of themselves (even with limited companies), is a whole different subject for debate.

Suffice to say that IT contractors should remember that they work for their own company and that it is their duty to act in the best interests of that company, as agents do for their agencies and employers do for their companies, and they’ll know what to do.

When offered a second, better, contract the contractor should choose the best one offered.

Stress – Ten factors in an IT department that will cause it

Stress in an IT Department

Ten things that cause IT Contractors stress.

Deadlines

These always cause stress – especially when they have been artificially cut, which they usually are.

The closer to the deadline you are the more stress there is. After the deadline it becomes almost unbearable.

Production Problems

These are especially stressful if either you caused the problem or you can’t solve it. If it is both, then add double points to your stress calculator.

Frustration

That is at knowing that things are not being done right. It is soul-destroying to come into work each day knowing that the project is going to fail.

You want to tell them how to put it right – but you know that they would not care to hear your contractor thoughts (again).

Overtime

Overtime can cause stress but it is especially so on a project that you know is going down the pan.

If it is dark when you come in and dark when you leave again it just adds to the stress levels.

It’s even worse if you are not being paid for it.

Interruptions

Constant interruptions when you are trying to concentrate is very stressful, e.g. if you work in one of those stupid places with an intercom that continually breaks the silence with “Paging Richard Robson”.

Talking Bar

Being in one of those places where you can’t talk at all, can’t have mental breaks, and have to look as if you are working all the time is especially stressful. Sadly there are too many places like this.

Working with an Idiot

Working with a complete idiot who cannot get anything right is highly stressful. He or she will make you look like an idiot too.

Being an Idiot

Being a complete idiot is going to make your stress levels go up – in so many ways.

Layoff Rumours

Being in a place where 30% of the workers, permie or contract, are going to be laid off shortly is highly stressful.

Who is to be got rid of becomes the main topic of conversation.

Being Terminated

Having your contract terminated is highly stressful, especially if you have financial commitments, very little money, and you know that the current contracting market is simply awful.

Pay on Time – What to do when your IT agency doesn’t

Pay on Time

It happens to many IT contractors, i.e. the IT agency does not pay on time. They always have an excuse. Here are the telltale signs and what to do.

Too many IT contractors leave it too late. They listen to IT agency excuses for non-payment and they just hope against hope that they are true and that they will soon be paid.

Even when the agency has broken their IT contract as regards payment, IT contractors don’t want to suddenly dump them because it could mean that they lose a month or two’s money and they could potentially lose their contract with the client who may not want the hassle.

Therefore they tend to do nothing except worry and to phone up the IT agency to hear the latest excuse for why they didn’t pay on time..

Take Action

However, action should be taken immediately otherwise there could be a lot of pain afterwards.

When Chamberlain Scott International went bust they owed IT contractors as much as 48K and quite a few were owed between 20K and 30K.

Here again a series of excuses were given as to why the IT contractors weren’t being paid and the more the contractors were owed the less likely they were to dump their agency and jump ship.

They just hoped against hope that everything was OK.

It wasn’t. The agency went into administration leaving the contractors’ debts with the administrator, set up a new company called CSI (UK) and bought the contract rights (the ones they wanted) from the administrator that they had appointed, for a tiny amount compared to the annual sales.

What to Do

So what should you do when your agencu doesn’t pay on time?

You should take action immediately if the agency have broken their promises and contract about payment.

Many IT contractors don’t want to upset their agencies especially if they are owed money by them, but you can bet your bottom dollar that the agency would be swiftly onto you if you broke your contract with them in any way.

Therefore you must be ruthless when they don’t pay on time. After all, they have let you down.

Advice

We put the question to David Greene of accountancy company Nasa Consulting, who have a legal division, as to what IT contractors should do when agencies don’t pay on time. Here is what they advise:-

1) Call the agency and ask why they didn’t pay on time. Advise that further delay will
lead you to discuss this with your client, and / or take legal action.

2) Advise your client that you have not been paid, and let them know you
cannot carry on working if this continues

3) Discuss the position with other agencies and see how they pay and if
they can take over your contract.

4) Engage a lawyer to pursue your agency

5) Pursue your agency through the www.courtservice.gov.uk/ . This
is a court service which is now electronic, simple to follow and
inexpensive.

ITContractor Comment

If your IT agency are letting you down you are entitled to act when they don’t pay on time. They understand this as they are a business as well and they have to chase clients for payment.

Even if an agency is facing financial trouble they would still have some cash as they are still invoicing clients, and those that push the hardest and are first in the queue will be the ones to get paid out.

Those that don’t want to annoy those guys at the agency, or who are afraid of upsetting them, will be the ones who will have to deal with the administrator (who offered 3p in the pound to Chamberlain Scott International’s contractor debtors).

Solicitor

A solicitor won’t cost too much in the beginning and will be well worth it.

There is a lot that they can do to get you to the front of the queue. For example they can take out an order to get the agency shut down if they don’t pay up.

Even in the dying days of an agency they are still fighting like hell to survive and there is a very good chance that they will pay out to the person who is causing the most trouble and trying to shut them down.

After all, the plan would be for them to go into voluntary administration with a friendly administrator, rather than a forced one, so that they can buy the contract assets cheaply in order to rise again like a phoenix from the ashes with a slightly altered name telling clients and contractors alike (at least those they want to keep) that nothing has changed.

Their Problem

Of course, most agency late payments are not caused by IT agencies about to go bust but often have good reasons.

However, that is their problem and, if they have broken their IT contract with you as regards payment, be ruthless with them. They would do the same with you if the boot was on the other foot.

The excuse not to fall for is the one where they say that despite what the IT contract says you will basically get paid when the agency get paid by the client.

Don’t fall for that one – especially as the law as changed to say that the agency must pay on time even if they haven’t been paid by the client.

Alarm Bell

With CSI one contractor told us that the excuse that they kept using was that they hadn’t been paid yet by the client.

The IT contractors then asked the client who said that they had paid up ages ago.

That is a real alarm bell ringing there. If that ever happens to you, you need to go in guns blazing with all the legal help you can get.

The agency is having serious problems if that is the case and only those who are the most forceful will get paid

Make sure that you are one of those!

What makes an IT contractor unsuitable for a job

Unsuitable for a Job

Following our story on How the government decides if there’s any skills shortages, I thought I would offer some helpful advice to agencies and employers on what makes an IT worker unsuitable for a job. According to the survey on the DEWR site, only about 17.5% of applicants who apply for any position are suitable for it.

With so many unsuitable people selfishly going around applying for jobs, it seems only fair that employers complain to the government about skills shortages.

Thus, IT immigration can be hiked up and “unsuitable” local candidates put in their place, i.e. unemployed or in an industry more in line with their skills such as food preparation.

The only danger is that the government may one day come around to ask why the other 82.5% of candidates were unsuitable. This is extremely unlikely, but you never know. So here’s a cheat-list of possible reasons to sticky-tape to your desk.

They were too old, or too young, or the wrong sex

Strictly speaking, giving this as a reason is illegal, but if you wink at the government inspector, he’ll know what you mean. Nobody wants an old fogey hanging around boring them with COBOL stories, and kids fresh out of uni are just dopes.

They were too ugly

We’re sick of having unattractive people around the place and were hoping for some eye-candy when filling this role.

They only knew how to program C++, VB, C, Perl, and PHP, we needed a Java person

It can take weeks for an experienced programmer to learn a new language. Do you think we have that sort of time? Besides everyone knows that every programming language is completely different. A C++ person knows no more about Java than the average person in the street.

They’ve only worked in insurance and we wanted someone with banking experience

Banking systems are completely different from insurance company systems. It’s a whole different universe. We were worried that their little heads may explode with the complexity of having to learn about a whole new industry.

They had the cheek to ask for more than we were willing to pay

Why should we pay anything more than peanuts? Asia’s full of people who’ll work for next to nothing All we have to do is get the government to rubber-stamp a work visa. Why on Earth would we ever pay our employees first-world wages?

There was some obscure part of the job that they had no experience in

We occasionally use the Bulgarian software application known as BorisNet. It’s not very complex, but we may need the person to operate it for an hour or so every year. While they had loads of experience in everything else we needed, no BorisNet experience is a deal-breaker I’m afraid.

They appeared to have too much self-respect

We’re looking for subservience and lots of it. UK workers are generally missing this key “people-skill” in our experience.

We’d have to train them

They were obviously experts in a large range of systems, but we’d have to send them on a two-week training course to learn our platform. Why should we fork out for something like “people investment”?

We want a person that’s been educated at someone else’s expense, preferably the Indian government’s.

They were only mortal, and we wanted a God

The list of skills we wanted for this job ran to over 400. The best we could find was someone with 15. Of course, there’s only 5 skills any person will actually need for the job, but why should we put up with something as sub-standard as a mere mortal?

These are some of the reasons why local UK candidates were ‘unsuitable’ for jobs. I’m sure that there are other reasons why they are unsuitable too.

Maybe they are unsuitable because they cost more?

What I want to say to IT agencies

What I Want to Say to IT Agencies came from our Comments section.

Want to Say to Them

Whilst not tarring ALL IT recruiters with the same brush my experiences this year show them up in a very poor light. This is what I want to say to them.

I have been IT contracting for 18 years now, but was out of work recently for a few months – I only got my current IT contract through an old colleague who called me when my vacancy became available or I would probably still be out of work.

Complaints

Things I want to say to Agencies:

Just because you get over 100 CVs fired off in reply to a job advert does not give the agent the right to ignore phone calls.

Sometimes the IT agency is straight up, that the agent just is not taking calls.

More often someone fields the calls and promises they will call back – 99% didn’t bother

Not Best Interests

I proved to one IT agent that they were not working in their client’s best interests by sending off CVs before reading those they had.

On this particular occasion a role was advertised on the Thursday being an exact match for role and industry – even if I was not THE best person for the role, I should certainly have been on the short list.

I fired off my CV and then followed up with a phone call – on this occasion the agent actually spoke to me and I spent 10 minutes explaining exactly why I should be considered for the role – she seemed to agree but claimed my CV had not come through, so I mailed it again.

Unavailable

The following day (Friday) I called again to check on progress and she was “unavailable” – needless to say the promised return of call didn’t happen.

On the Monday I called again, managed to talk to her only to be told she still hadn’t read my CV and would call me back.

She did do so, agreed that I seemed a good match (just like she had last Thursday) but then told me that CVs had been forwarded to the client on Friday!

Strung Along

I got strung along for a week or two before her senior consultant finally spoke to me – he told me they couldn’t possibly read all the CVs sent through as many were irrelevant.

They had to draw the line somewhere.

He couldn’t see that a candidate who by their own admission seemed to be a good match should at least have the courtesy of being considered, and that they weren’t acting in the client’s best interests.

I Know What I’m Doing

Finally after a heated discussion, in which he told me “I have been in this business for 5 years, I know what I’m doing” (and of course having been a contractor for only 18 years I am not qualified to question this) I emailed an account as to why I believed he hadn’t done his job, a couple of hours later I got an apology by telephone – but too late to help me with this role.

On Scrap Heap

Around April I went two weeks chasing after another similar role with the junior agent protecting her senior counterpart from me – finally she told me sheepishly that I probably didn’t make their shortlist because the client might be worried that I had been out of work for 4 months!

No credit for the full employment over the previous 10 years, or that my last contract in a highly relevant role had been for 3.5 years.

I was on the scrap heap because I hadn’t found a job in 4 months

Total Sum

I want to say it certainly wasn’t down to me not trying.

I only applied for those roles that I truly believed I should be in with a shout of, so as to not waste agents’ time, but still I had a wodge of double-sided paper an inch thick for those jobs.

Total sum was that maybe 10 of those I was put forward for – who the hell were ALL these people allegedly so much more experienced.

Even when put forward, half of the agents still wouldn’t return my calls to ask progress

Unprofessional

So maybe IT recruiters aren’t solely to blame but most have been lazy and unprofessional.

When the market turns these are the ones who find they will need to change their ways fast or go out of business themselves just like Porsche GB in the late 90s who treated customers with disdain while so many city types fought over their cars.

Come the stock market crash, they almost went out of business before reinventing themselves.

Given the Push | Ten things to do when you’ve been fired

Given the Push

It’s happened to quite a lot of us. It’s very disheartening when it happens and it wrenches at your self-esteem when you’ve been given te push from a contract. You may also have to tell a partner too that the company you work for no longer wants you.

So what should you do when you’ve been given the push?

1.

Firstly, don’t panic.

You are not the first person that this has happened to. It’s happened to millions of people before you – and the vast bulk of them (including myself) have gone on to get work elsewhere. There may be a downturn now, but it won’t last forever.

2.

Take the big decisions early.

Those companies, e.g. agencies, who have survived the downturn well are those that took the important cost-cutting decisions early, while those that have struggled are those who destroyed their balance sheets by delaying the big decisions, hoping for something to turn up. You must do the same.

Sit down and make a list of all your expenditures. Then take it on board that you might be out of work for a year or more and take the correct decisions early – including selling your house for a cheaper one if the mortgage is too big.

Your partner may complain, but if the money runs out, many have found that their partner walks too. Act quickly, and act decisively.

3.

Contact your mortgage company

to see if they can give you a mortgage holiday. If you can secure 3-6 months off paying, that will be a big boon to you

4.

Develop a regular routine of looking for work.

As long as your partner sees you making an effort, they will probably back you. Remember they have got worries too about the future, and seeing you doing little to get out of your situation will increase the worry on them and the worry, the pressure and the strain on you

5.

Don’t let yourself go.

In the past you used to do your ablutions first thing in the morning before you went to work. Now you don’t go to work so you don’t have a regular routine. The solution to this is to have a regular routine. I would suggest that you do your ablutions as soon as you get up, or do your first job-seeking stint in the morning followed by your ablutions, then breakfast, followed by your second job-seeking stint

6.

Have some time to enjoy yourself.

You may not have too many opportunities in your career to have time off to do some of the things you always wanted to do. Do the bulk of your job-seeking in the morning, so that you can feel more relaxed about enjoying yourself in the afternoon and evening.

Doing it in the morning takes the pressure off you, as your partner knows that you have already put in a good ‘working stint’. Tell your partner your new routine and get them to agree it, so that you don’t get “how come you’re sitting there watching the telly when you should be looking for work”

7.

Evaluate what you see as your strengths

and create your CV accordingly. You need to work out what your Unique Selling Point is and then bring that out on your CV

8.

Consider your job search to be a project

, and work accordingly. Tell yourself that it is just a normal job of work and that you will be putting in set hours. Think of yourself as an agent who has to make lots of calls just to get one lead

9.

Don’t get discouraged

if you don’t get a job straight away. Tell yourself that the odds are one in several hundred of you getting a job from each lead or CV send that you make. Also tell yourself that you must do the spade work of chasing those several hundred leads in order to get that one opportunity

10.

Lastly, keep your pecker up.

It’s not the end of the world when you’ve been given the push. You may feel that you’ll never work again at times, but few people who want to work remain unemployed for the rest of their lives. Do the things that you need to do (as stated previously) and that will help to keep your morale up. You’re going to get a job at some point. It may be next week, or next month, or next year. The harder you work at it, the quicker it will come.

Eleven Types of Characters You Find in an IT Dept

Types of Characters

At every IT department I’ve been to, and I’ve been to many, you usually meet an assortment of the same types of characters. Here are some of them:-

1. There is the guy, usually from Technical Support

who fixes something for you, mutters whilst he is doing it, doesn’t tell you what was wrong in the first place and often leaves without telling you if it is fixed or not

2. There are the types of characters who are very good technically

but are hopelessly organised. It’s a complete disaster when this type gets promoted. It’s one of the main reasons that projects go over time and budget

3. There is the manager at the office

who thinks that the girls at the office are all impressed with his power and majesty, and who doesn’t realise that they are all calling him an old pervert behind his back

4. There is the types of characters who always goes out to the pub at lunchtime

, stay two hours instead of one, comes back reeking of booze and don’t think anyone notices. However, everyone at the office talks about them as the office boozers

5. There is usually one girl at the office who wants all the guys to fancy her

. She wears revealing outfits and makes knowing eyes when she meets any guys in the corridor.

The more dangerous ones of the species may sit on a guy’s desk while talking to him or accidentally touch his hands while they are both pointing to something on the screen. It’s just a tease though.

There’s no point in acting on this, as she’ll just tell the other girls to beware of you as you had tried it on with her.

Often the other girls don’t like her, and talk about her behind her back – they notice it too

6. There is the contractor

who drives up in a flash car every day, and when a menial task is to be done (e.g. making the coffee) will tell a permanent person to do it as “my time is more expensive to the company than yours”

7. There are always the types of characters at the company who are part of the furniture

. They have never been promoted and are never likely to be, but they are too afraid of the big bad world to try their luck elsewhere

8. There’s always the types of characters who likes to cause trouble

or get someone else into it. If ever they find a problem in a program in test or in production, they will always make sure that everyone knows, especially the boss, what an idiot the person was who wrote the program.

Most problems when found are quite simple, so the creator of the problem has no real response

9. Occasionally there is the born-again proselytizing religious one

, who will often try to bring you to the faith when you get left in a one-to-one situation with them. You make a mental note not to let that happen too often

10. Another one that you might find is the health-food and clean-air freak

. They were really in their prime when smoking was allowed in offices.

Then they used to have all sort of contraptions on their desk to purify the air and ionise the atmosphere.

Nowadays they usually just content themselves with telling people what red meat does with their intestines, or explaining what sausages are made from, now that they can’t wave their hands, hold their noses or grimace any time a smoker comes near

11. Then there’s the curse of us all

– there’s the person who comes into the office even when suffering from a terrible cold or flu because he or she feels that the department needs them.

Most people just want the bugger to go home and not give them flu – especially the contractors who will lose pay if they are off.

For some reason, the ‘hero’ will always need to be very close to you at some point of the day.

Your instincts are to tell them to XXXX off, but you content yourself by trying not to breath in much air whilst he or she is near you.

Those are eleven types of characters you find in an IT department. If you know of others let us know in the Comments section below.

Dirty Tricks Played by IT Contractors on IT Agents

Dirty Tricks Played by IT Contractors on IT agents was written by an agent.

Dirty Tricks Played

My pet hate is when a contractor:-

• agrees a rate with agent/client A,
• signs contract and agrees start date,
• in the meantime s/he attends another interview with agent/client B and is offered a higher rate.
• Contractor then tries to re-negotiate with Client A and play the two off against each other,

Whilst I have no objection to contractors negotiating the best deal for their own Ltd companies I think it’s extremely unprofessional to do this once you have signed up.

The common view has been that there were loads of agencies so it didn’t matter p*****g a few off.

The problem is the end client then thinks contractors are unprofessional and unethical, and are wary next time round, that’s if there is a next time.

More Dirty Tricks Played

My other pet hate has been contractors going behind your back to the end client and negotiating their own contract.

I once had this happen, although I did laugh when the client didn’t pay the contractor 3 months money and he tried to get it out of me, claiming he was really working via us.

Taking jobs at client’s sites where you put them in before, even though there is a clause in their contract that says that they can’t work there for X amount of time without going through you.

They deny it point-blank when you ask them.

Other Dirty Tricks Played

Another pet hate is contractors falsely overselling themselves on Their CVs.

Yet another is when we tell contractors about a client, and they then ask you not to put them forward because they don’t like the client and then go direct through their own little agency.

Yes, IT contractors often accuse agencies of dirty tricks played on them, but they are up to all the dodges themselves when it comes to filthy practices.

Agency Tricks – Too Many on IT Contractors

Agency Tricks on Contractors

Agencies have been getting away with too many dirty tricks for too long.

Some agents, commenting previous articles said that these were just the ‘tricks of the trade’ and that other contractors benefit from them.

Agency Tricks – It’s Cheating – Not Tricks

What they don’t say is that they are using lies, deception and downright cheating to do such things as obtain leads from contractors whilst pretending that they might have a job for them. This is not only deceitful, it is cruel as well.

Why don’t they try first to get an IT contractor a job, and then honestly and openly ask them to help them get jobs for other contractors by supplying them with leads?

Most contractors will help IT agents who help them – especially if it helps other contractors.

It is only fair to say that other, more honest, agents, decried the tactics used by some of their less straightforward brethren.

Time for Code of Conduct

It is time for an effective industry wide IT Agency Code of Conduct which is known about by most contractors and agents and adhered to as well.

Agents’ representatives, Apsco, actually have a Code of Conduct and a disciplinary procedure, but its is seldom used, as it is little know, and I suppose that there must be suspicions on the part of contractors about Agencies policing themselves. REC has one as well.

I don’t necessarily hold those fears, as many of the agents doing these agency tricks are doing them without the knowledge of their directors. May of them are rogue agents and if caught would be discipline by Apsco or their own companies.

Not Working

However, the ‘agency tricks’ are happening too often for it to be claimed that any Code of Conduct or disciplinary procedure is working.

There are too few ‘prosecutions’ of offenders for the Code of Conduct to the thought to be working effectively.

It is to the disadvantage of fair and honest agents if their ‘rogue’ brethren are allowed to get competitive advantage on them. How can the industry expect them to remain fair and honest when the industry is allowing the rogues to have a head start on the honest ones?

This state of affairs has been going on too long. The practices (or ‘agency tricks’) are a blight on the industry.

This country has the best represented contractors in the world – when they are facing Government.

It’s about time that contractors’ representatives and representatives of the major agencies got round the table to create a Code of Conduct for relationships between IT agents and IT contractors – and it should be a two-way affair.

Agency Tricks should be done away with.

Umbrella Company or Limited Company the choice

Umbrella Company or Limited Company the Choice was written by Gerry McLaughlin.

Umbrella Company or Limited Company

Should I be in an Umbrella Company or Limited Company is a choice facing most contractors.

There are several good reasons for Contractors choosing to be in an Umbrella Company rather than a limited company

1. They are Caught by IR35 Tax

If contractors are caught by IR35 Tax then an Umbrella Company is by far the best vehicle for them. In an Umbrella company they can claim all sorts of expenses against tax. See our article What Umbrella Company Expenses can be claimed against tax?

2. They Fear they may be caught by IR35 Tax

Many contractors are unsure if they are inside IR35 or outside it.

Many don’t want the hassle of a potential investigation lasting years – so they just join an Umbrella company to have peace of mind and so they can sleep soundly at night even if they end up paying more tax than they would if they operated under a Limited Company.

3. They don’t want the hassle and the paperwork

Most Umbrella Companies take the hassle away from contractors. Contractors can then spend their time doing what they do best and that is contracting. They are effectively sending out the paperwork and all the hassle to the Umbrella Companies to do such as the tax and NIC and they don’t have to worry about VAT – or an inspection.

They have to pay more tax than they would as a Limited Company contractor but that is offset by peace of mind and a hassle-free life – as regards HMRC anyway.

4. They may get paid quicker

Many Umbrella companies pay contractors on receipt of a timesheet – before the client company or agency have even paid up. This avoids the hassle for contractors of waiting for payment or even chasing the agency.

Limited Companies

The main advantage of operating as a Limited company is our old friend cash.

It has been estimated that Limited Company contractors can save around £10,000 a year on tax and NI contributions.

That is quite a pile.

IR35 Worry

However, IR35 legislation is not exact and it is open to interpretation as to whether a contractor is inside or outside.

Also, a contractor may have been outside IR35 for one contract and inside for the next contract as it has been based on contract rather than contractor – although HMRC are saying they will skew it more towards the contractor’s normal way of working rather than contract by contract.

Still, the Limited Company contractor always has that worry that there may come a knock on the door followed by years of hassle from HMRC before having to pay back seven years worth of back tax which could potentially ruin him or her.

That extra £10,000 a year is tempting, though.

It is often down to the individual contractor if they want to take the risk or not.

So, the choice of Umbrella Company or Limited Company depends on your circumstances.

Company Set Up / Umbrella Companies

Those wishing to set up a Limited Company can set one up for free here Free Limited Company Set Up

Those wishing to find out more about which Umbrella Companies would be suitable for them can find out here on our Which Umbrella Company guide and our Directory of Umbrella Companies