IT Consultant?

[itSoleMan]

I have been offered a new position with a startup, broadly as a software developer but more like a general IT consultant. I have some experience with the guys heading the venture, and they have been trying to get me on board for the last couple of years as they prepared (and I have been helping them out at weekends and evenings until my workload prevented it) and more seriously now in the last couple of months. I'm happy to be working with them again, but with my experience with them it might smart to cover myself a little.

I decided to register as a sole trader and ask them to employ me on 6 month rolling contracts. I have no fear of this leaving me vulnerable, just that it could easily turn out that I need to pick up extra work to make ends meet if things do not go as planned. I have a company name registered and my TR1 form filled out and ready to send in - I decided to do a little reading in these forums first to understands the tax/other issues that would pop up and came across something that I think might be a big issue. I am looking at cxcglobal.ie for my tax by the way, not sure if it is overkill but I'll talk to them and see.

If this new venture takes off and goes as everyone hopes it will, I could very easily be a consultant with a client list of one. It has been suggesting in posts that the revenue views sole traders working with a single client as a normal PAYE employee, and can cause difficulties for the employee and employer.

I am not 100% tied to the idea of a sole trader consultant, but I just want to make things easier for myself and less of a burden to them financially if things do not go to plan. I would have a vested interest personally in seeing that things were successful.

I was hoping that if things go well that I would go in as a full time employee after a year (I have 6, 9 and 12 month milestones that I want to achieve to make this a thing that is "going well"). Am I needlessly making life difficult for myself? Is there another option that I could look at, or should I just go in as a normal employee and hope for the best?

I'd welcome any comments.

 

[z103]

I am not 100% tied to the idea of a sole trader consultant, but I just want to make things easier for myself and less of a burden to them financially if things do not go to plan. I would have a vested interest personally in seeing that things were successful.

Don't fall into the trap of not paying yourself, or paying too little, even if you do have a vested interest.

 

[contractor]

I'm happy to be working with them again, but with my experience with them it might smart to cover myself a little.

How will you be covered if you are not an employee? If you are worried things will go wrong then surely it should be the opposite, you should be a regualr employee and covered by a regular contract of employment and labour laws.

I decided to register as a sole trader and ask them to employ me on 6 month rolling contracts. I have no fear of this leaving me vulnerable, just that it could easily turn out that I need to pick up extra work to make ends meet if things do not go as planned.

If you want to take on other work to make ends meet you will find that agencies are reluctant to hire sole traders (in my experience they tell you straight out they will not hire sole traders). They will request that you either go through an umbrella company or that you have your own limited company. Not an issue obviously if you are not going through agencies but something to consider bearing in mind agencies suck up a lot of the vacancies.

 

[itSoleMan]

If you want to take on other work to make ends meet you will find that agencies are reluctant to hire sole traders (in my experience they tell you straight out they will not hire sole traders). They will request that you either go through an umbrella company or that you have your own limited company. Not an issue obviously if you are not going through agencies but something to consider bearing in mind agencies suck up a lot of the vacancies.

Well that certainly gives me pause to think - agencies might not have been my first call, but they definitely would have been a fall back position.

f you want to take on other work to make ends meet you will find that agencies are reluctant to hire sole traders (in my experience they tell you straight out they will not hire sole traders). They will request that you either go through an umbrella company or that you have your own limited company. Not an issue obviously if you are not going through agencies but something to consider bearing in mind agencies suck up a lot of the vacancies.

With that in mind then, if I go in as a full employee and have someone associated with the company ask me to "do a nixer" 2 days a week for a month how would I address it? I ask because this situation has been mentioned to me in conversations I have had with them, which makes me think that some may have tried to float the idea already.

 

[contractor]

With that in mind then, if I go in as a full employee and have someone associated with the company ask me to "do a nixer" 2 days a week for a month how would I address it? I ask because this situation has been mentioned to me in conversations I have had with them, which makes me think that some may have tried to float the idea already.

Assuming cash in hand is out of the question then I don't see why you cannot be in full time employemnt as well as running your own limited company. In fact this is how I am setup but the difference is my company has ceased trading (A days work is enough for me I've no interest or need for nixers). However I see nothing stopping me from working in my spare time thru the company, but I would ask an accountant first as it may not be allowed I'm not sure. But certainly I could easily do it now, there's nothing in place to stop me.

Edit: Actually don't bother asking an accountant, just ring the revenue and ask them. You'll find they're very helpful at giving qualified expert advice on situation like this.

 

[ontour]

To take a slightly different perspective on your issue, if you see this company as a good prospect and the people currently involved seem to have identified you as important to their success, your focus should be to share in the potential success over the medium to long term. If this is a short term high earnings opportunity, go down the contracting route.

Negotiating a relationship that reduces cost or increases your commitment should be attactive to the company. You have to decide whether there is a valuable trade off between short term earnings and long term return.

 

[itSoleMan]

Thanks for all the advice. Things seem clearer now, I will go the standard employee route and ring the revenue to see the official stance is on outside jobs.

 

[oopsbuddy]

The Revenue will only give you tax based advice. There are other commercial considerations here, which can be settled by negotiation and agreement between you and the new start-up, but much will also depend on what the other guys want or are prepared to give to you. A good business-minded accountant would be of genuine benefit to help you sort out the pros and cons, and maybe even help with negotiations. His fees could be money well spent in the end.

Assuming it is a limited company, do they want you as a full-time, employee, part-time, contractor or other. What are your preferences? If they want you full-time, would they be willing to offer you a shareholding and a directorship in the company now (before the project takes off and shares are worth more) to get you on board. After all, if they are that keen to get you on board, your efforts are surely going to contribute to this anticipated success.

You could also set up your own company if that suited your circumstances, and there could be a contract for services between your two companies. You would be free to provide services to others via your company, but a lot would depend on .

Make sure you have a good shareholders' agreement (or contract of employment or for services if not a shareholder) in place so that everyone knows up front what is expected of everybody, and what steps will be taken in the event of disagreement, or worse. Setting up companies or getting shares in one is easy, managing the relationships in them when things go wrong is almost impossible, but very few people recognise the importance of agreeing how to disagree and how to exit when there is no way forward, and to agree all of this BEFORE people fall out.

Best of luck with it, it sounds like an exciting opportunity.