Working as a contractor while part time farming

Hello,

I was looking to improve my take home pay and was offered contracting by my employer.

I was wondering if there are any additional concerns when farming part time in partnership with a parent and becoming a contractor?

I have been offered contracting in the past and rejected the idea because I don't see the options to write off tax and I amnt overly interested in pumping money in to a pension even though I am in my late 30s and have no pension.

Is it worth the hassle for a part time farmer?

The people I see doing well out of contracting are able to employ a spouse or relative and I cant do that.

There is the tax benefit out of the electric car but I can work from home these days. Id like to build a home office maybe that could be beneficial.

Dinzee Conlee

[Deleted User] wrote: »

Hello,

I was looking to improve my take home pay and was offered contracting by my employer.

I was wondering if there are any additional concerns when farming part time in partnership with a parent and becoming a contractor?

I have been offered contracting in the past and rejected the idea because I don't see the options to write off tax and I amnt overly interested in pumping money in to a pension even though I am in my late 30s and have no pension.

Is it worth the hassle for a part time farmer?

The people I see doing well out of contracting are able to employ a spouse or relative and I cant do that.

There is the tax benefit out of the electric car but I can work from home these days. Id like to build a home office maybe that could be beneficial.

What do you mean by contracting?

In my day job, a contractor is a non perm employee, usually employed through their own company or an agency...
In farming, a contractor is the lad that cuts the silage...

I assume you mean the former do you? So you’d you be setting up your own company to contract back into where you work now is it?

Mooooo

Talk to a good accountant I'd say

Bass Reeves

What type of farming are you at. You should never refuse a alternate income source if it is viable. If you have no pension you should definitely consider starting one. In your 30's you can put 20% of income into a pension and 25%in your 40's.
I think a lot depends on the time you think it will take and the how much your employer is willing to pay. But if they are looking for you it must be a skill that is in limited supply. As well you can reduce you farm.labour input by contracting in services like slurry and silage if not already doing it

_Brian

Be weary if they are looking to make you a contractor to lessen their responsibility and accountability to you as an employee.
Revenue I think will need to see a definite need and proof that you are a contractor rather than employee.

I’ve seen lads move to contractor status and then get very Spotty hours afterwards resulting in less Overall income. No holiday pay, given all the ****ty hours and ****ty jobs.

Dinzee Conlee

Dinzee Conlee wrote: »

What do you mean by contracting?

In my day job, a contractor is a non perm employee, usually employed through their own company or an agency...
In farming, a contractor is the lad that cuts the silage...

I assume you mean the former do you? So you’d you be setting up your own company to contract back into where you work now is it?

I would be changing to be an IT contractor with the company.

Currently work as staff but the benefits are so so anyway. I get sick pay, pension and holidays. No bonus or shares etc

Bass Reeves

Bass Reeves wrote: »

What type of farming are you at. You should never refuse a alternate income source if it is viable. If you have no pension you should definitely consider starting one. In your 30's you can put 20% of income into a pension and 25%in your 40's.
I think a lot depends on the time you think it will take and the how much your employer is willing to pay. But if they are looking for you it must be a skill that is in limited supply. As well you can reduce you farm.labour input by contracting in services like slurry and silage if not already doing it

I am already working at the company but they want me to go contracting to pay me more.

We are a suckler to beef operation. We get contractors to do the silage and big fencing jobs. I get help to feed cattle during week but I do the rest.

_Brian

_Brian wrote: »

Be weary if they are looking to make you a contractor to lessen their responsibility and accountability to you as an employee.
Revenue I think will need to see a definite need and proof that you are a contractor rather than employee.

I’ve seen lads move to contractor status and then get very Spotty hours afterwards resulting in less Overall income. No holiday pay, given all the ****ty hours and ****ty jobs.

I would think they will make me take jobs in less desirable sites (like staying at the site I am at now) etc if I go contracting.

Odelay

[Deleted User] wrote: »

I am already working at the company but they want me to go contracting to pay me more.

We are a suckler to beef operation. We get contractors to do the silage and big fencing jobs. I get help to feed cattle during week but I do the rest.

They want you to be a contractor so they can pay you less and drop you with out a moments notice.

I strongly doubt it is for the good of your pocket they are doing it for.

Dinzee Conlee

I am not sure they will pay you less - I imagine they will pay more if you go on a daily rate, but as already called out, you carry more risk.
The risks would be if the company went south, you'd be first out, contractors generally tend to get less choice in their work assignments, and a lot of companies expect more from their contractors in terms of being available at less notice, etc.

You no longer quality for any annual bonus, or any work related training. If you do have to get specific training, some companies wont pay for it, or if it is being run at a site you are at, you may not get paid for the days you are training.

In some companies, the perm employees might get a % increase most years, contractors might not, they might not even get their contract renewed...
If you do go contracting, and decide its not for you, some companies are against supporting such moves, so if you dont like contracting you might not be able to go back PAYE in the same company...

You have no sick pay if things go wrong personally... To get income protection insurance when contracting costs a bit - and lets not forget that farming is viewed as high-risk, so when you tell them that, it'll go up a bit more...

As for writing items off against a company - with farming you already have an advantage over other PAYE workers where you already have an avenue where certain items can be written off. So there isnt a huge advantage here.
You could sink more money into a pension whilst staying PAYE as well, so I dont see a big advantage here either...

IMO - I am not sure going contracting is the answer to your predicament to getting more money.
I think a better answer would be to look for another job that pays more, but I am not sure this is the answer you want

Bass Reeves

[Deleted User] wrote: »

I am already working at the company but they want me to go contracting to pay me more.

We are a suckler to beef operation. We get contractors to do the silage and big fencing jobs. I get help to feed cattle during week but I do the rest.

If you are already working for the company I be staying put. Contracting carries risk having said that with risk is usually higher reward.

As other say you carry more cost so you have to make sure that you are rewarded for that. If you are on 20/hour with the company directly you would need 40+ to consider contracting

Dunedin

Definitely don’t leave perm post to go as contractor.

Very uncertain times ahead between covid, brexit and whatever can be thrown at us and contractors will be first to be culled in any cost saving exercise.

Donald Trump

If they are the ones suggesting it then I'd be a little worried.

If it is your own idea, where you have skills that would be a little difficult for them to replace so much that you would be fairly sure that they would keep you rather than employ someone else, then less so.

If you switched to contracting, I'd imagine you are effectively resigning from the employer......if they know they need to cut jobs in 2 months it might be an easy way to save a few quid by having you basically waive all your entitlements.

lakill Farm

look at the idea of a limited company or umbrella company

Good ways to work as a contractor

Bass Reeves

Bass Reeves wrote: »

If you are already working for the company I be staying put. Contracting carries risk having said that with risk is usually higher reward.

As other say you carry more cost so you have to make sure that you are rewarded for that. If you are on 20/hour with the company directly you would need 40+ to consider contracting

They are offering over 50 an hour contracting

The benefit of holidays can be important but sure I could take them anyway.

Id say the job will be available as they find it hard to get people.

Will push for more as paye and also speak to accountant

I was worried about being involved in two businesses with the impact on the farm

J.O. Farmer

[Deleted User] wrote: »

I would be changing to be an IT contractor with the company.

Currently work as staff but the benefits are so so anyway. I get sick pay, pension and holidays. No bonus or shares etc

Were revenue not clamping down on exactly what you'resuggesting. IT contractors with only 1 employee working for 1 client or an employee in all but name.

Sick pay, pension and holidays are worth quite a bit. Holidays are worth a minimum of 8% of basic, pension depends on the company but say another 10%. If you get sick for the a week there's another 2% so already those benefits are worth an extra 20% and you have more job security.

How much extra do you need to justify contracting.

lakill Farm

9 bank holidays
20 days annual leave minimum

You definitely need to be able to charge 35/50% more as a contractor than a PAYE gross wages.

The difference between 35 & 50% will largely be down to the contract duration and T&C agreed

J.O. Farmer wrote: »

Were revenue not clamping down on exactly what you'resuggesting. IT contractors with only 1 employee working for 1 client or an employee in all but name.

Sick pay, pension and holidays are worth quite a bit. Holidays are worth a minimum of 8% of basic, pension depends on the company but say another 10%. If you get sick for the a week there's another 2% so already those benefits are worth an extra 20% and you have more job security.

How much extra do you need to justify contracting.

_Brian

I think if your not going to be able to take on a few lads and get them in under you on site and maybe on other sites to increase revenue and spread risk of work drying up I’d say the risk is too high compared to reward.

Otherwise the risk is you throw away permanent role to become essentially an employee with no rights.

Dinzee Conlee

lakill Farm wrote: »

9 bank holidays
20 days annual leave minimum

You definitely need to be able to charge 35/50% more as a contractor than a PAYE gross wages.

The difference between 35 & 50% will largely be down to the contract duration and T&C agreed

220 working days was the number used in 2 previous places I worked.

This was higher than the 20 days holidays. Probably more realistic, as most places give more than 20 days hols now, and add in some sick days as well...

Bass Reeves

lakill Farm wrote: »

9 bank holidays
20 days annual leave minimum

You definitely need to be able to charge 35/50% more as a contractor than a PAYE gross wages.

The difference between 35 & 50% will largely be down to the contract duration and T&C agreed

At that level usually you will have higher than minimum holidays. As well there may be expenses such as equipment and test gear you may now be required to provide yourself. As well if you are required to travel to sites who covers travelling time and expenses. Access to sites may require certification or training you may have to cover this now. Overnight costs, insurance, etc etc are all to be factored in.

I know self employed electricians that charge 60/hour. Most garages charge from 40-70/hour for mechanics. Going contracting as opposed to being employed at least double the hourly rate. I would not be overly worried about the economic situation as if you do it, you can insist the first contract is 2 years minimum

Lime Tree Farm

The contract offer needs consideration as to whether you will be their sole contractor or an independent contractor (available to other companies). Revenue differentiate which category.

As well, do you need to provide a replacement for times when you are unavailable.

https://www.revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-on-employment-status.pdf

alps

There are asset and income rules that apply at time of farm transfer. This need not inhibit what you do off farm, but it needs to be planned carefully.

A consultation good farming tax specialist is vital.

krissovo

I bought the family farm a few years ago that we are investing in some specialist areas and at the time I was contracting in IT as well. I found it useful to save on tax and put the cash back into the farm which it badly needed. I was running it as a limited company and employed my wife, we were both paid a salary that limited tax exposure.

I am now a permanent employee again and unfortunately its a role that I cannot be a contractor but if given the choice I would go back in heartbeat. Depending on your skillset there is a lot of demand in IT and I would not be overly worried about losing a contract

Get yourself a decent accountant and do not be afraid to pay them well, It's a worthwhile investment. On paper I come across as a crap businessman but the farm is on a roadmap to turn a decent profit in the next year or so and will likely leave my permanent role and go back to contracting on a limited time basis.

As mentioned earlier being paye employee with a farm has far greater scope for tax off sets and write offs etc than a non-farming paye employee. I’m not sure there is much extra you would be able to claim by being a contractor with a farm vs a paye employee with a farm. I wouldn’t say there are disadvantages either as far as the farm is concerned and really the decision should be based on what’s best for your off farm job and income - contractor or paye employee.

alps

Deleted User wrote: »

They are offering over 50 an hour contracting

2 different worlds....

IT contractor including laptop....€50/he

Agri contractor including €150k tractor plus plus fuel...€50/hr

49801

Odelay wrote: »

They want you to be a contractor so they can pay you less and drop you with out a moments notice.

I strongly doubt it is for the good of your pocket they are doing it for.

I’d agree

Sacrolyte

alps wrote: »

2 different worlds....

IT contractor including laptop....€50/he

Agri contractor including €150k tractor plus plus fuel...€50/hr

My dear fellow. It’s the age old rule of “Supply and demand”

Bass Reeves

alps wrote: »

2 different worlds....

IT contractor including laptop....€50/he

Agri contractor including €150k tractor plus plus fuel...€50/hr

Sacrolyte wrote: »

My dear fellow. It’s the age old rule of “Supply and demand”

Every young fella wants to be a tractor jockey, very few want to be a laptop jockey. Add in the factor that it takes little to be a good tractor jockey but a bit of ability and education to be a decent laptop jockey they the real law of supply and demand kickes in