Work Question. employee → consultant advice

Hello

Sorry if this is super vague but I wonder if anyone here has any experience, advice, links etc to do with going from an employee role in an org to being an independent consultant (doing pretty much the same thing at that org)

I know most of it will come from a UK perspective and that there’ll be specifics to my country that I’ll need to be very closely aware of but I wonder in general if

a) anyone has made this move and how it turned out?
b) if anyone considered this move and ruled it out. Why?
c) if anyone is currently considering it

and general pros & cons

ta everyone, any input big or small greatly appreciated

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Most of my mates are contractors. In the uk it tends to mean more money but less security. No holiday pay, sick pay etc. Got to be careful not to live to your increased income because of tax bills and you don’t get paid for time off.

They changed the rules on this sort of stuff recently to stop tax avoidance here too. I’d assume that your country might have something similar that you’ll have to look into

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a) no.
b) yeah. mo’ money but mo’ problems
c) not really.

there would be a lot more money to be made and seems like i wouldn’t struggle for work. but reckon it would take A LOT of effort trying to do all the administration etc and I decided it wasn’t worth it for me. i’m too lazy.

if you’re working as a consultant just for the one (same) company i guess a lot of that difficulty is removed

idk

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I looked into this when planning my move to France but it was legally questionable if my employer would be my only client as it is assumed this change has occurred to get around legal requirements of a UK company employing a resident abroad. Not sure if that is helpful at all as not sure if you work for a UK employer or not. I think it is often scrutinised to ensure that companies aren’t trying to dodge paying tax or employee benefits.

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I’m always flirting with the idea of going down the contractor route as

  1. There seems to be quite a lot of work about for my job
  2. The money is much, much better
  3. More of the roles seem open to remote working now, or there are gigs in London that I could work

Reasons not to

  1. UK brought in IR35 which makes it way more complicated
  2. No Pension, sick, job security, guarantee of work being available
  3. Having to work away from home (maybe add to the positives list)

I would be very sceptical of my current employer trying to move me from a contracted employee to a contractor though and would question the benefit or long term prospects of that to me, unless they wanted to quadruple my wage as well…

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Good advice everyone, thanks

yeah, managing the income into various compulsary and voluntary pots will be a skill

there are a number of services one can buy off the peg that will take care of this where I am, no doubt there’s a premium involved but maybe rather that than a massive fine or a sudden huge tax bill

again, Sweden is quite well set up to offer these union-backed benefits to freelance/contract workers but I’ll take a closer look as it’s probably not as simple as just carrying on paying my union dues

not sure this applies to me but it also might be worth a closer look at, thanks for flagging it

One thing I am concerned about is cashflow, has anyone got any real life experience of how much of a savings buffer/business loan or similar is realistic?

I’m thinking that if I’m going to take a business loan to set up properly then I need to do it while I still have my full time employment

We employ a marketing contractor on a consultant basis and it doesn’t seem to be a problem that we’re her only role, and as far as we’re concerned it’s full-time permanent. For ages actually we all thought she was full time anyway.

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I did similar at a few companies for ages. I stopped, partly due to IR35, and also because when I started contracting my intention was never to do 1-2 year stints at the same company. It just worked out that way. I’m sure your company has it all sorted, but if you’re her only client, and you’re paying her via an intermediary, and she’s working on something that has no real end date then she’s a ‘deemed employee’ and in HMRCs eyes should be paying income tax.

It all got really complicated, and I was just feeling like I was trying to fiddle my tax, so stopped doing it. Also started shitting it every time a letter in a brown envelope came through the door.

Pros
Money was decent but I guess it varies depending on what you do. I see the CVs of certain types of software developers and their day rates are eye-watering.
It’s much easier to get contracts than full time jobs - people know they can just bin off contractors, so no drawn out interview processes. If you’re half decent, places will always ask if you’ll go full time (current job I started as freelance)
You can expense work related purchase, like new computers etc - lots of people really take the piss with this though

Cons
No sick pay, no paternity leave etc
Harder to make friends (possibly a pro on here?)
Tax etc is a hassle - I needed an accountant
IR35

I wouldn’t go back to it now unless I was in a pinch.

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It’s not in the UK so may be subject to different rules idk

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Is this in the UK?
IR35 could bite on the arse here

Edit. No it’s not :grinning::grinning:

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Nope

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I seeee. Sorry!

Don’t apologise! :smiley:

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I mean look we may still be fucked I dunno :joy:

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