How to decide if IT contracting is the life for you

Before you take the plunge into the IT contracting world, you should consider carefully what you new life will involve and if your personality is suited to life as an IT contractor.

To succeed as a contractor, you will need to be a self-starter, highly technically skilled, and able to deal with risk and change on a reasonably regular basis.

Contractors typically work on projects for 6 or 12 month periods. Often these initial contract terms are extended, and sometimes you may work for just a few months at a time.

Once you join a new project team, you will need to find your feet quickly, get on with your new team mates, and get on with the job you were hired to do – as efficiently as possible. There is quite a dramatic change between your former role as a ‘permie’, and your new role as hired specialist ‘help’. On the majority of projects (particularly larger ones), you are unlikely to be the only contractor on the team, and you will often find that other contractors are pleased to help you settle in.

Upsides and Downsides
There are two great benefits associated with the contracting life – the change to earn significantly more money than you would in a ‘permanent role’, and the change to have more of a say in what you do, and when you do it. The freedom contracting provides is often cited as the greatest single benefit of being an IT contractor.

On the downside, you will be completely responsible for finding contracting work, for renewals, and running a small business. Although you will typically find help from an accountant, financial adviser, and fellow contractors, you are ultimately responsible for the success of you contracting career.

It is also in your interests to keep on the right side of the notorious IR35 tax legislation, and some effort on your part to seek professional advice to ensure your work is compliant with IR35.

Long-term contractors will often not consider the ‘risks’ involved with contracting as negatives – and often thrive in an industry where you have control over what you do, and to an extent – how much money you can potentially make.

At the time of writing, the contracting market has certainly seen better days. This may not be the ideal time to be taking the jump, but if you have the determination required, and in-demand skills, you may wonder in a few years why you didn’t take the plunge earlier.

Job market and employment criteria

With the economic downturn still affecting the UK jobs market, small firms and charities may benefit from seeking out candidates who have missed out on ‘top jobs’ in high-profile companies.

According to Chris Morrall, managing director at Talent Transitions, women in management looking to recruit new workers could take advantage of the lull in hiring among larger organisations.

Figures produced recently by the Association of Graduate Recruiters suggested that 57 per cent of such firms recently surveyed reported they intend to cut graduate hiring.

Mr Morrall said: “The graduate market is … down with the big companies, but then it’s the smaller companies that are actually picking up [graduates].”

There are many issues that must be considered when additional staff is being recruited.

For example, you must decide if the nature of the role requires a permanent worker, someone on a fixed-term contract, an agency worker or a freelancer.

Copyright acknowledged: Business Women’s Cafe

Looking for employment documents? Here they are.

Health and safety strategy

On 3 June 2009, the Health and Safety Executive (HSE) published a new health and safety strategy for Great Britain, see The Health and Safety of Great Britain: Be part of the solution (Strategy). The Strategy sets out the HSE’s goals for reducing the number of work-related deaths, injuries and illnesses.

Having sound documents, policies and procedures in place is just the first step. Acting on the procedures, provising follow up and reminders helps. HSE aims to reframe how Health and Safety responsibilties are perceived – less paper pushing and more realistic, practical and effective tools for a reduction of work place accidents.

The HSE has also confirmed that approximately 250 priced publications that contain health and safety advice and guidance will be made freely available from HSE’s website from September 2009.

Looking for Health and Safety documents? Find them here.

Employee’s annual leave; entitlement and safeguard

Here comes the sun – employers get ready for an inundation of holiday request forms from your employees, as staff begins to prepare for their holidays.

Although a lot of businesses have a workforce structure that enables adequate cover during holiday season, there are some that struggle due to the lack of staff and or financial resources to provide cover, during the holidays. It is therefore important that employers know their rights and authorise holidays according to the demands of the business.

Minimum annual leave entitlement

Every worker (with the exception of some excluded sectors) is entitled to a minimum of 28 days (5.6 weeks) annual leave, which includes all bank holidays. If the employee works less than 5 days a week, their entitlement must be calculated proportionally. For example if they work 2.5 days a week then this would be 14 days a year. However, there is a cap at 28 days – so employees who works more than five days per week are not entitled to receive more holiday.

Employee cannot demand specific dates for their holidays. Employers can refuse the employee’s request if the time off does not suit your business’s requirements. Furthermore, if you require the staff member to take annual leave due to a predicted quiet period, seasonal office closure, or for any reason that suits the business, then the staff member cannot refuse to take annual leave.

Requests for annual leave

In agreeing or refusing an annual leave request, the employer must be certain that it is done fairly and that it doesn’t discriminate against the employee. For example, if an employee wants to take time off during the busy period to attend a religious festival then you may accommodate this request in circumstances where you would refuse such a request made for leisure purposes.

A note on accrual: if a new employee requests annual leave at the commencement of their employment, you can agree to this if you choose to. However, legally, the employee is only entitled to take annual leave accrued over their first year of employment. This accrual is at the rate of one twelfth of the annual leave entitlement on the first day of each month of that year. This rule prevents employees from taking their full entitlement before they have actually done any work.

Protect your intellectual property

A new study suggests that cost and a lack of awareness are the two main barriers faced by small companies when looking at the issue of Intellectual Property (IP).

The study, undertaken by Said School at Oxford University, for the ACCA, offers recommendations for entrepreneurs and smaller businesses to improve their IP awareness, while also recommending that professionals dealing with SMEs – including accountants – also raise their own awareness of IP.

Rosana Mirkovic, Senior Policy Adviser at ACCA’s SME Unit, commented: “Every business owns some form of intellectual property” – an artistic design, shape, technology, process or brand. Big firms tend to know that. But smaller companies are often too preoccupied with the day to day running of their business to really take stock of what they have and the need to protect it. Net Lawman’s in house legal team specialise in intellectual Property rights – between us, we have more than 40 years experience!

Here are some top tips to protect your IP:

• Find your IP

Remember that anything that sets your business apart can be protected, including your name, logo, inventions, designs, creative or artistic works.

• Conduct an audit

Conducting an IP audit is essential in order to capitalise on your business. This needs a little time, but if you are thorough you will be able to make sure you are protecting all of your IP and not infringing anyone else’s.

• Get legal protection

The four most common ways the law provides protection for your IP is through trademarks, copyright, patents and designs. These, except copyright, need to be applied for and follow strict guidelines, so you should seek guidance to make sure your IP complies with the regulations. Ask us how.

• Prevent infringement

You could lose your IP rights if someone else picks up your idea before you’ve had it protected. It is essential that all your business’ material including IP rights be kept safely and securely so you do not lose your claim to originality. To avoid IP infringement, ask your employees and anyone else you disclose information to, to sign a confidentiality agreement. Also, keep a hard copy of information locked up.

• Respect others

It is important that you don’t accidentally breach someone else’s IP. If you do this, legal action could be taken out on you as well as orders to pay damages. To avoid this, carry out searches to ensure you are not breaching someone else’s IP. In some cases you can get professional help with this from either a patent agent or trademark attorney.

When times get tough, the tough get.. sharing

The motto of the The Four Musketeers, ‘All for one and one for all’.. sits well with the concept of fractional ownership in today’s economy. Solidarity, unity and loyalty are important characteristics to be had in 2009. Bearing in mind the implications of the GEC (I promise I’ll mention it only once), it is a good time to consider, or reconsider whether you really need that Nissan GTR / Custom made super yacht or Mallorca mansion.

Sometimes the answer isn’t to sell. It’s probably a bad time to sell. I don’t suggest you do it. And yet perhaps you need the money.. OK, so you don’t need it, but it is becomming harder to justify to your wife / husband that it is a necessity. Instead of sell up, why not fractionalise?

Almost anything can be fractionalised, or shared – employees, yachts, cars, boats, real property (consider you holiday house in the Maldives), jewelery, animals (dogs and horses for example). The benefits? You retain ownership of your little beauty, you ensure it is kept in good hands, the resource is made good use of and most importantly, you can quieten your partner because you’ll get some money back for offering it up for sharing.

The most important aspect of sharing, or fractionalising, is to ensure the terms on which you act are clear cut. that is, both the legal terms of who owns what, and also the practical terms, such as what happens to your race car when it isn’t in use, who fills it up with petrol, who replaces the windscreen when a stone hits it on your Sunday morning exhiliration drive? The best way to deal with these matters? have everything agreed in a written agreement.

Of course we provide all the fractional ownership documents you require. That goes without saying. If you need more info on fractional ownership, talk to the specialists at Yours2Share.com – our partners in fractional ownership.

Effective HR policy and employee assessment

Now, and certainly tomorrow, human capital shall be a business’ most important asset. Human resources, talent, employees – can make or break an organisation.

Not only is it important to recruit key employees but to train them appropriately, measure their effectiveness and provide useful feedback and rewards when desired behaviour is achieved.

HR policies and procedures form one part of that process. Employee assessment and appraisal for example, requires behaviour and outcomes to be measured. Recording the result is a good idea – but many organisations allow paper pushing to become a measure of achievement. Having the paperwork handed to the line manager on time is only half the story – what matters is bottom line results.

So go the extra mile and follow up on monthly employee assessments, circulate the no smoking policy to staff by email, post an article on the benefits of healthy lifestyle choices on the intranet, and consider how to best reward employees – extra cash bonuses, or more flexible childcare for example?

Recording the results with employment policies, procedures, employee assessment forms and well drawn employment contracts is one thing but ensuring that HR initiatives are completed 100% requires more than paperwork.

Net Lawman stock all kinds of employment contracts, contractor agreements, employee assessment forms, HR policies and procedures and formal letters recording communication between employees and managers. Always been short of time? Get systems in place today while the world is resting – when the GEC is over you’ll come out fighting.

Sharing agreements – fractional ownership

Looking for brilliant way to save (or make!) money from what you already own? Look no further. Enter ‘legal sharing’. There are a number of ways of going about sharing an asset legally.

Perhaps you have a swimming pool that you can rent to your neighbour to use every Tuesday, or perhaps you have a race car that you’d allow to be raced by a third party. These are simple sharing agreements – in fact, at law, you are leasing, or licensing the asset (swimming pool, car, boat, horse, land or whatever else) to the third party. This is generaly called ‘timeshare’. The third party doesn’t have any right of ownership to the asset – whatever that be.

A second sharing method is ‘fractional ownership’, where more than one party owns the asset. You could fractionalise almost anything, from a dog to an employee or an aircraft or piece of antique jewelry. Fractional ownership means that at law, both (or all if there are more than two) parties own the asset and have a legal right. Of course the parties themselves must decide the hows, whens and wheres. Take the example of a dog. It is no good simply agreeing that you’ll own half of it and Betty down the road will own the other half. A dog has to be fed, watered, cared for, walked and so on. So in addition to any legal agreement as to percentages or proportions of ownership, you must also decide who shall walk the dog, who is responsible for feeding it and paying the vets bills. The same applies to any asset – an aircraft for example. Whilst it does not need feeding exactly, it must be decided who refills it at the end of a flight.

So if you fractioanlise with a friend or family member, you may trust them not to bother with a written agreement. However, the larger the asset (if you share land or a holiday house in Spain) the more sensible it is to record the deal. (Of course if it is real property, the owners must be on the conveyance deeds anyway). A well written legal agreement will ensure that all, or both, owners know their part in the deal. Not only will it record the legal, but it will set the terms for the sharing arrangement, allowing you to sit back and enjoy the ride.

Net Lawman of course, stock many types of sharing agreement – for cars, boats, horses and land. If we don’t have a template version ready to download, we shall be more than delighted to draw a bespoke agreement for you.

Have a question? Drop us an email here.

Maternity pay proposals – a mixed response?

Maternity pay proposals – a mixed response?

Proposals made recently by the Equality and Human Rights Commission concerning parental leave have received a mixed response, says Sue Evans, a partner at Lester Aldridge.

Under the terms of the proposals, which are set out in a Working Better report, women would be entitled to the first 26 weeks of maternity leave on 90 per cent of their salary. Beyond that, leave can be taken in three blocks of four months, one for the mother, one for the father and one for either parent. These would be available at any time during the first five years of the child’s life.

Ms Evans stated: “We will have to wait and see whether the proposals will be implemented in full or rather a more compromised approach adopted.”

Women in business seeking to find out more about parental leave can visit the Directgov website, which contains information concerning workers’ rights.

Looking for maternity and paternity documents and letters? Click here.

Setting up a limited liability partnership

A few days ago we were discussing limited partnerships and the important of having a deed of partnership in place. Well, what if you want to set up a Limited Liability Partnership? An LLP is a relatively new concept (we are talking years!) and restricts the liability of the partners even more so than a regular limited partnership. It acts more like a company in that it is the LLP itself – not the individual members – is responsible for any debts (unless individual members have personally guaranteed a loan to the business).

LLPs are trickier to set up than regular partnerships as they have to meet many of the same requirements as limited companies. LLPs are designed to be used by profit-making businesses only.

The members of an LLP normally share in both the responsibilities of running the business and the profits. Exactly how their rights and responsibilities are defined and divided depends on the LLP’s partnership agreement or ‘deed of partnership’. Designated members have some extra responsibilities on in addition to those of ordinary members.

When you set up you must contact your local HMRC office to let them know the business exists. HMRC will send a Partnership Tax Return, which must be filled in to show the partnership’s income and expenses for the tax year.

The partnership should appoint one of its members – the ‘nominated member’ – to fill in the Partnership Tax Return and return it to HMRC. The nominated member should also make sure that other members of the partnership are given copies of the Partnership Statement, to help them complete their own personal tax returns.

Although the nominated member has responsibility for the Partnership Tax Return, all the members will be jointly liable for any penalties that result from it being submitted late or incorrectly.

Have a burning legal question? Ask away…