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How I Took The Leap #3: Gareth Poulter

Posted by Gareth Poulter on 8 January.

After contracting in the UK for nine years, I’m no stranger to the pros and cons of contract work. But after having relocated here to New Zealand, the circumstances this time around were slightly different.

 

Back then in the UK (post the Y2K bug non-event), I was stuck in an appalling job with an appalling boss and took the first opportunity to escape, which turned out to be a contract. I wouldn’t necessarily recommend this as an approach. I mean, sure I earned lots, had a lot of holidays and bought a lot of cars. But equally, I lived away from home during the week for nine years and drove back and forth every weekend to places 300 miles away. It wasn’t a great quality of life.

After safe-havening through the GFC (and given a slight change in personal circumstances), I quit my job, sold my house and emigrated to Wellington. This time I took a couple of years to establish a network of contacts and to get used to the Wellington market (the latter was harder than the former!), before I decided to begin contracting here. As a lot of friends and ex-colleagues have asked me whether contracting is worth it or not, here’s my advice in a handy bullet-point format:

  • Think hard about whether contracting suits you. You do not get paid sick days, paid holidays, or any benefits. Don’t just look at the headline hourly/daily rate and compare it to your base salary. You might have to get professional indemnity insurance, for example, and you may wish to have a company such as Hnry take some of the financial homework off your hands, or you may wish to pay an accountant to do your books. Either way, do the maths properly before you make a decision.
  • You will rarely get paid training as a contractor. If you’re good at Task A you may contract as a Task A expert; however if Task A is no longer needed in the marketplace you will need to fund your re-training yourself as well as establish a reputation as an expert in your new field. Bear this in mind if you’re contracting in a technical field. Coding languages fade in and out of prominence very quickly these days.
  • In my experience, contractors are treated less like ‘contracting scum’ (a repeated and genuine term heard in the UK) by permies in NZ, and it’s not unheard of to come across contractors who have been in the same place for many, many years. This is a GOOD thing. Never underestimate the power of a positive work environment – not being hated by 70% of your colleagues just because of your employment status is a good first step.
  • In New Zealand you can contract as a sole trader, which means that you don’t need to register as a company (unless you want to, of course). This cuts the full accounting expense out and prevents you from having to file taxes for two entities (yourself and your registered business). All you need is a GST number, which takes 5 minutes online to obtain, and a bit of advice regarding which BIC code to choose (this determines your percentage ACC contribution - see my first point!) and you’re pretty much good to go. It is SO much easier to get set up here than it was in the UK.
  • The IRD are actually quite nice people and help you resolve any issues. For example, this year my appointed payroll company (a common occurence on contracts with big organisations, as you can’t always pick who you work with) failed to count to 12 and sent the wrong information on my earnings to IRD. Having been forensically audited three times in the UK by an Inland Revenue staff member who was convinced that I was trying to hide some earnings (I was not), it was not a good feeling to be under the scrutiny of the tax authorities here. However, all it took was a friendly thirty minute phone call to resolve what they termed a ‘discrepancy’. Be nice to the IRD, it will pay you back in spades.

I personally like contracting because of the personal freedom. If you’re just not feeling it and it doesn’t affect your work, most places are happy for you to take time off or knock off early (after all, they’re not paying for it!). I find this helps keep the work/life balance, well, balanced.

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