From Cog to Contractor

As my first contract comes to an end, I thought I would take a few minutes to write about the journey from a standard employee, to becoming a Java Engineering Contractor.

There are many things that are appealing as a contractor:

  1. The money is better
  2. You can pick and choose the work (to a degree)
  3. There are no disagreements about who is going to work Christmas
  4. You are hardly involved in the political conversations of an organisation
  5. If the work becomes less interesting, it is easier to move on

These are all the things that really gave me the motivation to move away from being a regular employee within an organisation to becoming a contractor.

There are some downsides that you also need to think about:

  1. You do not get paid for taking holidays
  2. You need to consider the tax implications of each client
  3. You may need to travel further for the type of work you want
  4. The political conversations of an organisation can revolve around you
  5. An organisation can get rid of you much easier, if things are not working out

These are the risks that you need to think about when considering your options. I decided that the pros far outweighed the cons, and I took the plunge.

The first step was to find a contract. I have often been contacted by recruiters who have tried to tempt me into contracting, and they have been unsuccessful. The contracts have often been for companies I have not heard of, or have been too far away, or have been considered inside IR35 (I will come to that later). I used one of my many contacts to find a contract, where he had recently been placed. This gave me a lot of confidence, because I knew someone, and they had recommended the client. They had also recommended me to the client, which I think helped with my confidence for the first contract. There is nothing worse than imposter syndrome when you switch jobs, and thinking “Should I really be doing this? Am I really good enough? Do I have the skills?”, and the recommendation was really welcome. I really feel that having a good network is vital to successfully finding clients, as a contractor. These can be recruiters or people you have worked with previously, but it will prove useful to know many people so that you get a good range of work.

Contractor interviews tend to be much shorter, and efficient than regular employee interviews, and after a quick telephone interview, I was invited for a face to face interview with a technical test. My recommendation here is to make sure you leave plenty of time to get to a client. I left three and a half hours to get to Bristol for my face to face, for a journey that should take an hour and a half, and I was still late due to a combination of the M5 being shut at Taunton, and really heavy summer holiday traffic. The technical test was also a short affair, after apologising profusely for being 15 minutes late, it was over within another 30 minutes. My experience in interviewing and hiring contractors helped, because you listen out for key words, and watch for modern techniques, to understand that the person you are interview really does know what they are talking about.

Contract won, time to think about getting set up. There are a couple of ways of setting up as a contractor. The simplest way is to fall under an umbrella company. They take your pay, and calculate your tax, and then pay you, all for a handsome fee on top. I chose to set up a limited company – Devinity – as I could not help but think that paying someone for doing all the things I can do myself did not seem worth it. I ask the same colleague who helped me find the contract to who he used as an accountant – and he recommended Crunch. He also pointed me at QDOS for public liability and professional indemnity insurance – essentials for any contractor. The accountants had an offer when I signed up, and they would incorporate the limited company free of charge – a saving of £60. The insurance cost around £400, and I pay monthly for my accountants, but I get contract reviews to ensure I am working outside of IR35, and they file tax returns and self assessments for me.  The accountants recommended I set up a business account with Metro bank, as it integrated with their systems. All of these things took around five or six days to get set up, bar the bank which took a little longer – but it is not necessary to have that set up until you get paid, so taking into account notice periods and the first few weeks of work – you have plenty of time.

IR35 is UK government policy around Off-Payroll working. There are a number of things that make up being a regular employee. Having your own desk, letting the company reward you in the same way they reward their permanent staff, being paid for sick leave or holidays, are just a few of them. Avoid these and you are a supplier rather than a worker.

The first day at the clients site, was just like the first day anywhere else. There was mandatory training that needed completing, to make sure I was unbribable and that I understood the clients policies, which applied to companies working for them. There was also the same IT chaos that I have come to expect following various employments, and hirings of other developers – if I ever run my own company where I employ others, I will make sure this is seamless, easy, and ready for their first day. A quick tour of the team I had joined to help, and I was thrown in with a brief overview of the architecture of the system, and my first problem to solve. Needless to say, I was over the moon to be writing code so quickly.

I have learnt a lot in the last six months about running a business, and the complications associated within: expenses, pay, tax, self assessments, needs and wants. More importantly, I have learnt a lot about myself in the last six months; my own ability to adapt my technical skills; my own ability to run my company; my own ability to not get caught up in office politics; my own ability to come home and switch off; my own ability to relax. This contract is coming to an end, and I am starting my next almost immediately. I am looking forward to new challenges, and seeing what else I can learn about myself.