Is contracting right for you?
Contracting in the UK opens up a wealth of opportunities. You can control your own business affairs, but how do you get set up? Talk to our friendly team for help laying out all the options for becoming a contractor.
Are you considering contracting? Do you want more autonomy or are you looking to shift to a more flexible working schedule? There is no doubt that becoming a contractor has its benefits. However, for those who are considering leaving their permanent role, the prospect of becoming more self-reliant securing your own contracts might seem daunting. We’re here to provide all the information you need to embark on your contracting journey.
At ContractingWISE we have many years’ experience helping contractors and those who are ready to start their journey in contracting. We know that it is not always an easy step to take, so we’re here to provide information and support so that you can spread your wings.
What do I need to consider before starting my contracting journey?
There are a number of considerations for those moving from permanent to contracting. Not only will it impact your private life, but also the way you manage your personal finances. You’ll find yourself needing to brush up on your knowledge of certain employment and business legislation too.
First and foremost, you will need to consider how to set up. Will you use an umbrella company or set up a limited company? This will dictate a number of decisions, like do I need to hire an accountant? If you use an umbrella company you won’t need to find yourself an accountant, but if you choose to set up a limited company, you should be asking how to find a good accountant. As April 2021 draws closer, the number of contracts that will benefit from or allow use of a limited company will dramatically reduce. Find out more about your working options here.
Contracting sounds problematic, will it be right for me?
Unfortunately, there are a lot of myths and misconceptions which surround the practicalities of contract work, and often dissuade permanent employees from taking the step of becoming a contractor. Contract work may seem difficult initially, with new paperwork and a different working structure, but the benefits of contracting can help you to overcome these challenges.
Dispelling the myths
I’m ready to start my career in contracting. Where do I begin?
First of all, if you’re confused at where to begin you can speak to one of our contractor specialists.
Call 0203 642 8679, OR request a free call back.
If you’re raring to go, you can follow these simple steps to get started:
1. Research your market
Whether you work in IT, Management Consultancy, Finance, Healthcare or Energy, the contracting market is built on the same principles. It’s highly important to do your research though, and see where you fit in to the mix. Consider your skills, and what clients are looking for. Remember the jobs market can be volatile, and factors such as Covid-19 and Brexit have a major part to play in the availability of jobs across different sectors.
A good way to find this information is by checking job sites to see what contracts are available, and what the desired skills are. You can also chat to your contacts in that sector, or recruiters, who will be able to give you a flavour of the market. Don’t forget many skills are transferrable, so you may be able to secure work outside your usual sector. You may face fierce competition for lucrative contracts, so make sure you are clued up before pitching yourself.
2. Set yourself up
You can’t start a contract until you have a means of invoicing and receiving funds for the work you do. Setting yourself up as a contractor will involve a choice between establishing a limited company, or choosing an umbrella company to work through. Operating via a limited company is the most tax-efficient way to contract, but there are increased legal obligations and you will spend more time on paperwork. Using an umbrella company will omit these obligations, but for a fee. Find out more about the differences here.
3. Make sure you’re insured
Much like when you move house or buy a new car, becoming a contractor means that you’ll need to make sure you’re suitably insured. If something goes wrong during your contract period, you won’t be protected like a permanent employee, and you could be held liable by the client. We explain the types of insurance here.
Ready to launch your contracting career?
Read our handy guide on making the leap.
Read about a day in the life of a contractor
Read our guest post contribution from Henry Sharples, a Chartered Mechanical Engineer with over 20 years’ experience working as a contractor in rail safety.
Finally, Find a Contract
Finding a contract often follows good preparation, presentation and performance. When seeking a contract amid recession these principles alone may not be enough to place you in good stead, so make sure you are flexible and aware of the marketplace you are competing in. You can read our guide on how to find a contract in a Covid affected market here.
When you’re just starting out, you may find it easiest to search for contracts via an agency. For your very first contract this will be helpful for getting tips on how to pitch yourself and how to adjust your CV for contracting. Agencies will also be able to help you set your rates, and let you know if you’re competitive. Read our top tips for choosing a recruitment agency here.
Don’t forget, recruitment agencies take a cut when placing you on an assignment – normally a margin of around 15%-20% of your contract value. Once you’ve started to get a name for yourself you may wish to source your contracts yourself. You can do this via networking, applying directly via job sites, or by using social tools such as LinkedIn to boost your network and increase your visibility.
Ready to go?
Request a free consultation with one of our friendly team today. We’re here to provide options and answer all your questions.
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