Tuesday, May 6, 2008

Head-Hunter Lesson Learned

I have a potential client lined up for a bunch of work over the next few months. Sounds good right? Well...

I was placed at this client through a head-hunting company. This was my first break into the independant world, and they were a great introduction, so I have no complaints. However, they recently changed their stance on sole proprietors and incorporated entities.

Basically, if your inc then you're ok...but if your sp, then you get treated as a term employee, with tax taken off and everything...so you're not *really* independant (and you lose the ability to move what would have been taxable dollars into RSP savings instead of just handing it back to the government).

So now I've been out of this client for about 6 months, but there's a 1 year non-compete clause that we both signed with the head-hunters. The problem is that I can't go in as an sp because i'm not willing to be considered a term. I'm also not going to jump through the hoops and pay out the money to rush an incorporated status just to be able to get this gig.

Complicating this further is that when I did my taxes this year, my accountant asked me why they issues me a T4 at all (the head hunter place said they had to take CPP and EI off). They didn't...and because they issues a T4, that meant that I'd get flagged by Revenue Canada, so i had to claim all that money under taxable income.

We'll see how this shakes, but right now I'm thinking that unless they let me ba a *true* SP and just invoice them and leave it at that, this contract might not fly. Which is ok...the one year ends in the fall and if they still have work I'll be free from the shackles of the head hunters.