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Original poster

Should I consider contract opportunity

12 replies

OnlyFannys · 12/05/2023 16:32

Hello, I am currently working in a perm role on a good salary of just over £70k, I have been approached by a recruiter with a contract position that has a day rate of £600 (outside IR35). I have always planned to contract at some point in the future however the reasons I havent yet are that I would like to move to a bigger property within the next 2-3 years and I worry about how difficult it could be to get a new mortgage. My partner is also studying at the moment and isnt working, would expect him to be working within the next 3-4 months. I would have liked to have a decent amount of savings before I start a contract role, I have enough saved to last me for 2 months but I would have liked at least a 6 month buffer in place.
I feel like these are all very good reasons not to consider a move away from my current role as it is well paid (national average for my role would probably be 50-60k so if it doesnt work out I might not be able to get the salary I have now elsewhere). On the other hand I am not particularly happy in my current role and have been looking at other jobs. The day rate is great and I had always planned to contract at some time, maybe I should just dive in? I would be really interested to hear some non biased opinions, thank you

OP posts:
Original poster
OnlyFannys · 12/05/2023 17:54

Hopeful bump

OP posts:
BramblyHedgeMouse · 12/05/2023 18:12

The problem with contracting is the lack of security, so you have to be prepared for worse case scenario.

What would you do if you were let go after a week? Could you find another role (either contract or perm) in less than two months without being very stressed?
It sounds like you would struggle to make ends meet @ £50k if you only have 2 months worth of expenses on £70k.

It might be a good idea to save a bit more before taking the plunge, and revisit in a few months when your partner is employed. Can you do anything to improve your current job in the meantime? E.g. move teams, extra training …

If you go for the contract, my advice is be careful of lifestyle creep, so save the extra money as a buffer to use when your contract is up, this can also be used for a deposit when you want to move house.
Ultimately it’s up to you what level of risk you’re prepared to take.

lljkk · 12/05/2023 18:14

is it fixed term contract or casual ad hoc contract?

Original poster
OnlyFannys · 12/05/2023 18:28

BramblyHedgeMouse · 12/05/2023 18:12

The problem with contracting is the lack of security, so you have to be prepared for worse case scenario.

What would you do if you were let go after a week? Could you find another role (either contract or perm) in less than two months without being very stressed?
It sounds like you would struggle to make ends meet @ £50k if you only have 2 months worth of expenses on £70k.

It might be a good idea to save a bit more before taking the plunge, and revisit in a few months when your partner is employed. Can you do anything to improve your current job in the meantime? E.g. move teams, extra training …

If you go for the contract, my advice is be careful of lifestyle creep, so save the extra money as a buffer to use when your contract is up, this can also be used for a deposit when you want to move house.
Ultimately it’s up to you what level of risk you’re prepared to take.

Thank you, all very sensible advice and pretty much mirrors my thinking around the lack of security and making ends meet if I had to reduce my income..I do have expenses I could cut down but I dont want to make my family life uncomfortable in the process.. ultimately I think it does come down to how much risk I'm willing to take and my gut is leaning towards not taking the risk.

OP posts:
Original poster
OnlyFannys · 12/05/2023 18:28

lljkk · 12/05/2023 18:14

is it fixed term contract or casual ad hoc contract?

It's an initial 6 month contract with potential to extend

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Kazzyhoward · 12/05/2023 18:35

Do your own checking and due diligence re them saying it's outside IR35! You really don't want to be led up the garden path and then find it's caught by IR35 at the last minute once you've signed up and given notice on your current job!

If you go ahead, get a good accountant to set you up with your book-keeping, payroll, VAT, etc., as you need to get it right and more importantly understand your tax liabilities and put them aside as you earn, otherwise you may end up spending the taxman's money and then not be able to pay when the time comes, several months later. You also need to get the right mix of wages and dividends to pay yourself, understand what expenses you can legitimately claim, etc.

Original poster
OnlyFannys · 12/05/2023 18:47

Kazzyhoward · 12/05/2023 18:35

Do your own checking and due diligence re them saying it's outside IR35! You really don't want to be led up the garden path and then find it's caught by IR35 at the last minute once you've signed up and given notice on your current job!

If you go ahead, get a good accountant to set you up with your book-keeping, payroll, VAT, etc., as you need to get it right and more importantly understand your tax liabilities and put them aside as you earn, otherwise you may end up spending the taxman's money and then not be able to pay when the time comes, several months later. You also need to get the right mix of wages and dividends to pay yourself, understand what expenses you can legitimately claim, etc.

Thank you, this is an area I really need to research as my understanding is quite limited. I would absolutely get an accountant as I dont trust myself not to make a mistake!

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iontheprize · 12/05/2023 21:56

Dh and I have been contracting for almost 20 years and in our experience the lack of security has been a bit of a myth. We have both been in companies where we were retained while permanent staff were made redundant BC what the auditora cared about was reducing headcount and salary spend and we were a different budget line. Stupid, I know.

Original poster
OnlyFannys · 12/05/2023 23:31

iontheprize · 12/05/2023 21:56

Dh and I have been contracting for almost 20 years and in our experience the lack of security has been a bit of a myth. We have both been in companies where we were retained while permanent staff were made redundant BC what the auditora cared about was reducing headcount and salary spend and we were a different budget line. Stupid, I know.

That's really interesting thank you, it's good to hear from someone who has done it. Other than getting myself registered as a limited company, working out invoicing and organizing an accountant is there anything else I need to think about to get started?

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Kazzyhoward · 13/05/2023 07:45

OnlyFannys · 12/05/2023 23:31

That's really interesting thank you, it's good to hear from someone who has done it. Other than getting myself registered as a limited company, working out invoicing and organizing an accountant is there anything else I need to think about to get started?

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You need to explore insurance options, as a minimum you should have a general business "combined" policy which usually covers public liability, employers liability (your ltd co employs you), equipment (your ltd co would be buying a laptop, printer, phone etc for tax relief), which is pretty cheap (maybe £20 per month) but you may also need professional indemnity insurance which may be a requirement of the contract or may be a requirement of any professional body you're a member of, and that's likely to be more expensive.

ConnieSaks · 13/05/2023 08:48

I was in a similar position and never regretted taking the plunge - I set up a limited company and had a good accountant (my liability insurance was cheap too!). Also VAT registration (DH likes doing VAT returns so did mine!).

Original poster
OnlyFannys · 13/05/2023 11:27

Thank you both I hadnt thought about insurance so that is incredibly helpful advice. Also great to hear that people have taken the plunge and not regretted it

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