New to all this - considering contracting

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Hi All

Just that really. I have a lot of solid work experience over 20 years and have struggled in the last 5 years with repeated redundancies. I've been asked to interview for a role that is on a contract basis. Do you/should I be doing this through an umbrella or is it easy enough to manage self employed contractor tax NI etc yourself?

TIA

I was a contractor for 7 years and my husband still is. I wouldn’t go through umbrella personally I did that when I first started and they take a big percentage your day rate. I did this thinking it would be easier then being self employed with my own business but as long as you find a good accounting company they will make it so easy for you and should help your set up your company and get you going.
If you accept a contract depending on the business they might expect you to have a company already set up so you’re ready to go, less of a problem if they have a vetting period before start date

Good luck!! I’m a SAHM now but I loved being a contractor in the financial sector and I think your right about how a permanent positions are so unstable at the moment.

Thanks Frankie. I don't really know how to compare the day rate to make sure I'm better off, which I suppose is irrelevant as I'm unemployed right now!

I know I need to pay my own Tax and NI, where do I find the rules in what is deductible? Like mileage. Is my normal mileage to the office included? I'd be based at 3 sites, one is in Europe. I'll go for it and worry about all those bits if I get offered the role! thanks!

Have a look at the roles you’d go for and I’m sure there’s a calculator online that gives you a rough percentage you’d get following which route

My accountant used to just tell me when to pay tax, vat, self assessment etc how much and all reference number etc and made it so easy I never looked into it much. I definitely took a hands off approach. I think you’d be able to get all the info from HMRC website though.
Expenses wise I used to fly to Barcelona a lot and would claim back, petrol to train starvation, train ticket and plane fair etc and then petrol/train to other offices and alway lunch! Add up quick :) . Expenses are definitely the best way to get your money out of the business tax free but a good accountant should let you know everything you can claim for I was with the accounting firm NASA consulting for a few years, they were so good at explaining everything to me I needed to know. Just ensure you go with a specialist contractor accountant otherwise they haven’t got a clue

Depending on your area, there is a bit of an uptick in contract work at the moment because companies are uncertain about brexit / the economy and will pay over the odds for the flexibility. Def not umbrella, cost doesn't justify it.

I know I need to pay my own Tax and NI, where do I find the rules in what is deductible?

That's why you'd be best to find a good accountant from day one rather than muddling through, wasting your time trying to find out the rules, making mistakes, etc. The accountancy fees will probably be around the same whether you engage them now or wait for the first year end. That's because they'll have to spend time sorting out your mistakes if you leave it a year, whereas they'd spend a similar amount of time telling you how to do it properly in the first place.

Just ensure you go with a specialist contractor accountant otherwise they haven’t got a clue

Make sure that any firm you approach is properly qualified and regulated. You need to be looking for "chartered" accountants. In the UK, literally anyone can call themselves an accountant and set up an accountancy practice, even if they have no experience nor qualifications - it's not a protected term unlike a solicitor, architect, doctor, etc. There are quite a few "contractor specialists" firms who aren't qualified and regulated so just be careful as you'd have no redress if things went wrong.

Thanks so much! The agency have muted the potential to go through them as PAYE for the first 3 months. I think I'd go for that option while I work out if the whole job/contracting is right for me.