Contracting Market Forum

UK Contracting Rates __(Posted: 46 weeks ago)

Keep up-to-date on what your contracting skills in the UK are worth (on average) - Contracting Pay Rates

IT Contract Work FAQ __(Posted: 46 weeks ago)

What's the difference between being a contract employee and an independent consultant?

Contract employees are hired by consulting or staffing agencies and then placed in assignments at businesses that need help on projects. Independent consultants typically market their own services to businesses and bill them for those services. The term "consultant" is often used to refer to both situations. This article refers to contract employees.

Who pays me as a contractor?

The staffing agency. At the end of the year, you'll receive a W-2 from the agency. Independent consultants, on the other hand, get 1099s from their clients and must pay self-employment taxes and quarterly income taxes.

Will I make more through contract employment?

About 30 percent more is typical, says a representative of one staffing service that places permanent and contract IT professionals. That monetary advantage may disappear, though, once you take benefits into consideration.

Will I receive benefits?

"Fringe benefits vary widely," says Joshua Feinberg, cofounder of Computer Consulting 101, a training firm for IT consultants. The staffing agency may offer -- or allow you to buy into -- group health and retirement plans, but you may not get paid vacation or sick time. Depending on the firm, you may be able to negotiate benefits.

Is there a common duration for assignments?

A typical IT assignment might last about six months. Three-month or year-long assignments are also common.

What are the key parts of the contract I sign?

The agreement between you and the staffing firm will likely spell out the pay rate, the contract duration, your job role and your hours. Some contracts may include other details specific to the company, such as the dress code.

What does contract-to-hire mean?

In these arrangements, the staffing agency agrees with the company that after a certain period -- six months, for instance -- the company will have the option to hire you as a permanent employee. You have no obligation to accept that offer, and the company has no obligation to extend one.

What does being "on the bench" mean?

Some staffing companies retain their consultants even if they have no work for them. That means you would be paid without having to report to an assignment.

What if I leave an assignment before the contract's end date?

The agency will expect you to give ample notice before leaving. Agencies prefer that you do not leave in the middle of a contract, but it happens. Just don't make a habit of it.

Will contracting give me more flexibility?

In theory, yes. As a contract employee, you can take a six-month assignment, say, and then take a few months off to travel or pursue a personal interest.

Will I need to travel for assignments?

Not always, but if you have a very specialized skill, travel may help your prospects. "You definitely help your position in the marketplace if you're willing to travel," says the regional manager at a staffing firm in Akron.

Will I keep learning?

"Consulting does allow you more freedom to develop your skill set," he says. "When you work for Company X, Y or Z, you are limited to the technologies within those organizations." Some say that contracting requires a different mentality about learning. You need to realize that you're building your skill set for yourself, typically by gaining exposure to new companies, new challenges and new technologies with each assignment. That means you should seek assignments that fit with your overall career goals.

Budget 2007 and Managed Service Companies __(Posted: 46 weeks ago)

Budget Note 46 (here - Section 46) confirms that the MSC legislation will be introduced in the Finance Bill 2007 (as announced in the Pre-Budget Report).

The legislation will ensure that income received by individuals who provide services to an end user (via an MSC) will be treated as employment income.

Therefore, the MSC will have to account for Income Tax (PAYE) and National Insurance on all payments received by individuals using the Company.

Budget Note 46 provides that there will be changes to the draft legislation, in terms of defining which structures will be caught.

Phil Richards from Manager Group told Bytestart: “After speaking with HMRC representatives it was confirmed that the amended draft legislation should be available on Thursday 22nd March. I was disappointed that they were unable to publish the actual draft legislation issuing only a Budget Note "BN46” describing what the new legislation would do.”

Once this is published Manager Group will analyse it closely, but for now we know the following:

Date announced for the start of the Debt Transfer Provisions

There was positive news that the debt transfer provisions have been delayed for all third parties including recruitment agencies until 6th January 2008.

Definition of a Managed Service Company an “MSC” and an “MSC Provider”

The Managed Service Company rules were clarified in the Budget Release BN46 which outlined the definition of a Managed Service Company (MSC) as a company that is an intermediary within the IR35 rules

(Ltd Company used by a worker to provide its services), and is provided by an MSC Provider.

The legislation will define an MSC by the characteristics of the MSC Provider, the company that provides the MSC to the worker.

It is important to note that under these modified rules ALL the intermediary companies (MSC’s) provided by an MSC Provider will be caught under the rules and have to apply PAYE on all income, and exclude travel expenses for that assignment.

The only guidance so far as to the definition of an MSC Provider is as follows:

“Broadly, an MSC provider includes businesses which are involved in promoting or facilitating the use of companies to provide the services of individuals”

But importantly there are exceptions to this broad rule which are:-
For employment agencies and employment businesses which do not influence or control the finances of the companies or the way in which payments to individuals are paid.
There will also be exclusion for people providing professional accountancy and legal services.

Top 10 UK Skills __(Posted: 46 weeks ago)

1 Analyst 16,446 £21 £404
2 Developer 15,242 £32 £404
3 Financial 13,808 £26 £428
4 Structured Query Language (SQL) 9,436 £29 £394
5 Microsoft Windows 8,816 £20 £355
6 Banking 7,869 £34 £475
7 Oracle Corporation 7,646 £33 £423
8 Microsoft .NET (dotNet) 7,127 £32 £385
9 Business Analyst 6,711 £35 £456
10 Microsoft SQL Server (MS SQL)