Thinking of Becoming a Contractor? Our Key Tips to Starting Out

Thinking of Becoming a Contractor? Our Key Tips to Starting Out

Oct 28, 2020

COVID is prompting many people to reconsider their work/life balance. If you’re thinking of going freelance or becoming a contractor, that’s great news! Whilst there are downsides which must be carefully considered, thousands of people enjoy the freedom and flexibility of this way of working. If it’s something you’re thinking about, our specialist contractor accountants can help you look at your working options before you decide to take the plunge.

 

Here we provide you with some top tips to getting started as a contractor:

1. Think about the pros and cons.

Working for yourself gives you lots of freedom and flexibility, but it’s not right for everyone. You’ll be responsible for finding your own work and, whilst there are lots of great recruitment agencies you can join, you’ll have to be comfortable with having less job security. Many successful contractors find that this is a short-term worry, but they soon get into the swing of finding new work, building contacts, and creating a good reputation over time. However, contracting can seem quite daunting at the outset – especially as you’ll need to plan for times when you’re not earning, such as when you want to take a holiday.

Being a contractor can be highly rewarding, but it pays to think carefully before you give up a secure job.

 

2. Determine the most suitable working option.

It goes without saying that it’s important to work compliantly and pay the correct tax whether you’re employed or self-employed.

When working for yourself, there are various working options you could consider, some of which will be more appropriate to your circumstances than others. We can help you understand which would suit you best and enable you to maximise your take-home pay.

While Limited Company contracting may be suitable if you can work compliantly ‘outside’ IR35 (i.e. you are not subject to supervision, direction, control or a number of other factors), it does involve attending to admin and accountancy responsibilities of being a company director. This is not for everyone, so Umbrella contracting can be a good alternative. As an Umbrella contractor, we take care of your tax obligations and provide employee benefits (such as holiday pay, sick pay, a pension, and insurance cover) and you can build a record of continuous employment which is helpful when applying for mortgages and other types of loans.

Alternatively, you may be able to consider Freelance contracting as a great way to get started. Or, if you’re a construction contractor, CIS may be the best option for you.

We’re here to ensure you work through the solution that suits you best which is why we take all our new contractors through a free contractor assessment and take-home pay illustration to ensure you know what to expect before you decide on your new working solution.

 

3. Spend time on your CV.

When you first enter the contracting industry, finding and securing your own contracts can seem daunting. But one of our best pieces of advice for any new starter would be to ensure your CV is up-to-date and sells your skills properly. Spend time improving your CV so that you stand out when going head-to-head with other contractors applying for the same roles.

Click here to view a range of CV tips from Hays, Worldwide Recruiting Experts.

 

4. Be flexible.

Trying something new always involves trial and error. Expect your new career as a contractor to take you some time to settle into. It’s important that no matter what roles or assignments you take on, you remain positive, adaptable, and flexible. Whether you’re working for an agency or directly for an end hirer, you need to put your clients first and always ensure they’re happy with the work you’re producing because having a good reputation is one of the best ways to ensure you keep securing contracts and earning new work.

Flexibility extends to the sort of work you look to undertake, but it can also include adapting new skills to help you win new roles. For example, you may need to develop better computer skills or improve your interpersonal communications. Take feedback from the people you work for and look at other people who are succeeding as contractors – what are they doing that you could learn from? What advice can people give you to help you get the most from being a contractor?

 

5. Understand IR35 and be sure about what it means to you.

With changes to IR35 legislation due in April 2021, you need to ensure you’re working compliantly. We have extensive experience in IR35 so can answer all your questions and help you understand how you are affected and what to do about it. Our IR35 Plus solution provides everything you need to prepare for the upcoming IR35 reforms, including expert guidance, unlimited support, a reliable IR35 assessment tool, and a range of contracting solutions depending on your IR35 outcome.

Whilst it may sound complicated, it’s actually quite straight-forward. If you’re ‘outside’ IR35, you may be able to work through your own limited company. If you’re ‘inside’, then you will need to consider joining an Umbrella company. If you’re in the construction industry, then the CIS scheme could be an option. Under certain circumstances, working as a freelancer may be the most appropriate way to go.

If you are ‘inside’ IR35, you will need to choose which Umbrella company to work with. Making the right choice and finding a great Umbrella company is extremely important as they’ll be acting as your employer and helping you to work compliantly. Our IR35 Plus solution can help you to work compliantly.

 

6. Protect yourself (Crest Plus provides insurance as standard).

Setting out on your own as a contractor or freelancer can be scary. If something goes wrong with the delivery of your work, you are likely to be held liable for your mistake. To avoid risks of financial liability, you will need robust insurance in case something goes wrong.

We appreciate the importance of this issue so we’ve put together an excellent insurance package to protect you. Our Umbrella contractors are covered by up to £5,000,000 professional indemnity, up to £10,000,000 public liability, and up to £10,000,000 employers’ liability. Plus, we provide personal accident insurance as standard – and we even cover your commute for added protection.

 

No matter which working option you choose: Umbrella, CIS, or Freelance – our experienced team will be on hand to help you get set up in the right solution, receive accurate and on-time payments, and make the most of being a contractor.

If you have any questions or would like to discuss which solution would be best for you, call us on 01244 684700.

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