Work as a Contractor: How to Get Started
Are you someone who fancies becoming your own boss?
Then you need to become an independent contractor!
Contracting is for those who are able to work according to their own time. There are many different benefits when you work as a contractor, but likewise there are risks involved.
You can rely on one of the best contracting sites in the United Kingdom – Comparison Contractor for trusted and reliable information.
The range of benefits when you work as a contractor include the following:
- You set your own pay as an independent contractor
- High rates of pay
- High demand for contracting work
- Flexible hours of work
- Choose when & where you will work
- Plan your work around holidays
The risks involved are quite a few such as the following:
- Lack of security
- Not a permanent or stable job
- Difficult to get steady source of work
This blog is designed to help you in making the decision to work as a contractor. You will be able to understand if contracting is the best choice for you.
Follow These Crucial Steps to Work as a Contractor in UK!
You Must Do Relevant Research
When you venture out to find contracting work, it is not the same as just applying to be in permanent employment. You have to thoroughly research your independent contractor market to make sure that your services are in demand. You have to develop or work on your skills which are in demand rather than fighting with numerous others who are completely capable of the ordinary skills.
During your research, you will find the rate being charged for such services and if your skills can demand a higher, lower or similar rate. You must then calculate how much work you will get based on the average rate, your experience and try to see if it is financially feasible for you.
There are numerous ways to do this by checking online adverts, contractor calculators, recruitment agencies in your industry, etc. You may also consider where you live and where there is more work available. You want to be suitably located in an area where there is demand for your work.
Becoming Part of a Network, Finding Contacts & Contracts
The easiest way to do research or to hunt for jobs or to look for work as a contractor is of course – online!
You can look into online job boards such as indeed, reed, etc. to find the many different types of contracting jobs, contract rate, clients, agencies, companies, and other contractors. This is will give you an idea of the industry and help you to become part of a relevant network.
You can sign up with recruitment agencies, subscribe to newsletters, follow contractor blogs, forums, social media, etc. Something like LinkedIn can be an excellent social media tool for networking, finding contacts like recruitment agents and landing new contracts.
Set Yourself Up as a Company
Once you get relevant contacts and land a contract, you will need to organise yourself to run as a business. When you work as a contractor, you are a business so set yourself up as a company.
You can choose to do one of the two most popular contracting business models:
- A Limited Company
- An Umbrella Company
Whether you set yourself up as a limited company or work under an umbrella company, there are pros and cons of both.
When you set up a limited company, you become a director and shareholder of the company. It is the most tax efficient way for you to work as a contractor. It gives you complete control over your finances. There are lots of legal paperwork and tax obligations which must be maintained.
If you are scared of running your own finances, then you must consider investing in the Right Accountant.
Deciding which one of these two options is best for you is key to your successes in the contracting industry. So, you must ensure that you carefully consider weigh up each of the advantages and disadvantages before making a decision.
Get Yourself Educated About IR35
IR35 is a tax legislation which has been the talk of the town for contractors, freelancers or self-employed people in general.
IR35 was brought into effect to close out loopholes which allowed freelancers to unfairly take advantage of tax benefits. However, it has highly impacted the contractor industry and you must keep yourself up to date about HMRC and all their policies.
Get Insurance for Yourself
As a contractor, you will be going to clients and providing professional services. You will be dealing with travel, clients, advice, decisions, money, day rate, contract rate, accountancy fees, financial contributions, etc. which impacts a lot more than just yourself. So, you must keep yourself well equipped with proper insurance in case something goes unexpectedly wrong.
You must be ready as many clients or companies, may choose to file a claim against your company which is YOU!
No matter who skilled, expert or experienced you may be with your skills, there will be mistakes. Clients will want to claim benefits according to their contracts which will take a heavy financial toll on you.
You must opt for Professional Indemnity insurance and others which are specifically designed for the contracting industry. Not only will Professional Indemnity insurance protect you against claims, legal costs, etc. it will give you the peace of mind needed to work as a contractor.