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IT Freelance Setup - Advice/Help

IT Freelance Setup - Advice/Help

Old Jan 12th 2009, 10:00 am
  #1  
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Default IT Freelance Setup - Advice/Help

Hi People,

As this website has been a great source of help for me in getting my visa, I thought I'd see if anyone was in the same position I was in and can give me some help with the following:

I'm an IT Contractor/Freelance person. Whilst out on my validation trip I managed to land a nice 6 month contract in Melbourne.

I'm currently in the position where I am trying to sort out things in the UK before heading back out to Aus in the next 2/3 weeks.

I was wondering whether anyone has been in this position and can advice where I can look for info on setting up a company, getting contracts checked, etc.

I know what the procedure is in the UK, however there do not seem to be any sites that I can find in Australia that shed any light on the process in Aus.

Is there an equivalent to the Professional Contractors Group within Australia, for example?

Many thanks for any help that you can give.

Rick
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Old Jan 12th 2009, 10:18 am
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Default Re: IT Freelance Setup - Advice/Help

There is a group similar to the PCG but they have a lower profile. I've never had the need to join such a group.

Personal Services Legislation
There is similar personal services legislation to IR35, one aspect of which is the 80/20 rule. I've never heard of the need to get contracts checked out here. The personal services rules are a bit clearer here.

Modus Operandi
You need to decide your modus operandi: own Pty Ltd, own Trust, PAYG from the agency, under an umbrella or other arrangement from a contractor management company.

There are a few players in the contractor management space: Freelance, Entity Solutions, CXC if you don't want to roll your own. The agency may try to steer you towards any existing contractor management co/s they have relationships with. The contractor management companies also have various offerings some of which may treat you as an employee for tax purposes and so obligate a full PAYG income tax, 9% super contributions but also provide you holiday/sick pay.

GST registration
With your own entity you would have to register for GST the same as UK VAT registration.

Insurances
Professional Indemnity/Public Liability insurance requirements. These are usually included if you go with a contractor management company.


Which way you go would probably depend on a number of factors:
  • how you operated in the UK
  • your personal circumstances
  • how risk adverse you are

To try to setup your own entity in 2-3 weeks may be difficult remotely. For my first contract (1 month) I went with a management co whilst I established my own entity.
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Old Jan 12th 2009, 11:02 am
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Default Re: IT Freelance Setup - Advice/Help

myitg operate in brisbane.

Your agent will sort out payg etc on your first contract and then get yourself sorted - you can negotiate your pay/agents commission. Someone told me that they have to tell you, by law, their bill out rate. They never want to although I wait until I get a position then get it out of them

Then you can negotiate against a set percentage. I spent a fair bit of time working out what percentage agencies work at, this is dependent on your position, skillset and how much they need you.

All agencies say you have to have professional indemnity, its expensive and worthless. I usually refuse very nicely and negotiate a little on that and to date have not been forced to get it. Again this is all after I have been offered the job.

On a first contract, especially if you get a shorter term one, you can use that time as a setup and work out your own guide on how much you should earn etc.

You can get an ABN on abr.gov.au once you have a tax file number. Cleardocs are great for setting up a pty ltd and its all self explanatory, can do it yourself. Then speak to an accountant about whether the company operates with a discretionary trust for tax reasons, mine doesn't but most do I think. A good accountant I like are accountantnet.com.au (Brian). Public Liability you can get through an agency even if you dont have a managed payg relationship.

Its hard to get away with the 80/20 rule unless you change contracts often. It never affected me as I also had income from sales on another interest and also our company has my husband working through it. You coudl talk to your accountant about how arriving in Jan sets you up on the 80/20 rule as its not a full financial year.

You should really speak to an accountant about setting up full stop. I never worried about contracts here.


good luck
Vivienne

Last edited by viviennef; Jan 12th 2009 at 11:07 am.
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Old Jan 12th 2009, 12:39 pm
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Default Re: IT Freelance Setup - Advice/Help

ossigeno and vivienne,

Thanks for your replies. This has certainly provided me with more information than I had access to.

I'll be getting in touch with an accountant today (via email) to see about the 80/20 rule and setting up a company (or possibly using a management company for this first role).

Thanks again,

Rick
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Old Jan 13th 2009, 8:29 am
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Default Re: IT Freelance Setup - Advice/Help

Originally Posted by hawkwind View Post
ossigeno and vivienne,

Thanks for your replies. This has certainly provided me with more information than I had access to.

I'll be getting in touch with an accountant today (via email) to see about the 80/20 rule and setting up a company (or possibly using a management company for this first role).

Thanks again,

Rick
Hi

I'm also contracting in Melbourne. I went with the agency at first, they took care of everything, insurances, tax, etc...

However after getting of my backside and speaking to an accountant, he setup the company, trust, gst. The only insurance i've been asked to get by my agency is Workcover, the agency provide me with cover for Professional Indemnity/Public Liability insurance requirements.

PM me if you need anymore help

All the best
G
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Old Jan 13th 2009, 9:11 am
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Default Re: IT Freelance Setup - Advice/Help

I am not sure workcover cover you as the director of a company though so check first with your accountant about the set up of your entity.

Viv
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Old Jan 13th 2009, 9:25 am
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Default Re: IT Freelance Setup - Advice/Help

Originally Posted by viviennef View Post
I am not sure workcover cover you as the director of a company though so check first with your accountant about the set up of your entity.

Viv
I will do, I am also questioning this as.

Cheers
G
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Old Jan 13th 2009, 9:36 am
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Default Re: IT Freelance Setup - Advice/Help

Originally Posted by ossigeno View Post
There is a group similar to the PCG but they have a lower profile. I've never had the need to join such a group.

Personal Services Legislation
There is similar personal services legislation to IR35, one aspect of which is the 80/20 rule. I've never heard of the need to get contracts checked out here. The personal services rules are a bit clearer here.

Modus Operandi
You need to decide your modus operandi: own Pty Ltd, own Trust, PAYG from the agency, under an umbrella or other arrangement from a contractor management company.

There are a few players in the contractor management space: Freelance, Entity Solutions, CXC if you don't want to roll your own. The agency may try to steer you towards any existing contractor management co/s they have relationships with. The contractor management companies also have various offerings some of which may treat you as an employee for tax purposes and so obligate a full PAYG income tax, 9% super contributions but also provide you holiday/sick pay.

GST registration
With your own entity you would have to register for GST the same as UK VAT registration.

Insurances
Professional Indemnity/Public Liability insurance requirements. These are usually included if you go with a contractor management company.


Which way you go would probably depend on a number of factors:
  • how you operated in the UK
  • your personal circumstances
  • how risk adverse you are

To try to setup your own entity in 2-3 weeks may be difficult remotely. For my first contract (1 month) I went with a management co whilst I established my own entity.
I found the CXC local guys very good [certainly in Perth] but the admin office in Sydney [which handles payments etc] was woeful.
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