Are you looking to be your own boss? Do you enjoy controlling your time and deciding which projects are worth working on? If so, contracting might be the option!
Our quick guide to contract work in the UK gives you a taste of the contractor lifestyle.
See if you are ready to face this new challenge.
Contractor Lifestyle; Weigh the Pros and Cons
Contracting appeals to many; however, don’t be lured by it too quickly! Weigh the pros and cons first. Take some time to reflect on the reason that drives you into contracting, and be honest with yourself. The contractor lifestyle is not for everyone, and there’s no harm in that. Being a contractor has many advantages. It can offer you more flexibility, to be in charge of your time off, be your own boss and might even offer you the possibility to pick more interesting projects to work on. Besides the diversity of work, what attracts many people is the potential earnings. This can be considerably higher if you are willing to take that path.
Alas, every rose has its thorn.
IT Consultants are expected to be highly flexible regarding location and start date. You might get a new job and be asked to start within the week or the next day. Furthermore, it may involve a lot of travelling, depending on your region. You must be ready to live out of a suitcase and enjoy hotels. The latter can be quite challenging for those who need to be close to their family, and remember that your lifestyle can also impact them. You may encounter major issues with work fluctuation and other unforeseen events. Sometimes you may have a long-term contract and the next time a short one.
As a contractor, you ought to be good with money. As you are the director of your company, you won’t get any pension, paid holidays or sick days.
Check the Demand!
So far, so good; you have read the above paragraph and are still motivated to become a contractor.
Before jumping into contracting, make sure that you assess the demand and know your worth. The rate fluctuates considerably from one IT contractor to another. Usually, when companies hire a consultant, it is due to a need to have an expert onsite in a particular field of technology. Specializing in some of the latest technologies will offer you a higher rate and more opportunities as the demand grows, like for DevOps, Big Data or Machine Learning.
On the contrary, if you specialise in outdated technology, getting frequent contracts at your preferred rate can be fairly challenging. To understand better your market value, you can contact recruitment agencies to help you out. They will be able to advise you accordingly.
At Agile Recruitment, we specialize in data recruitment covering IT and data analytics areas. Feel free to get in touch, and we will be happy to discuss it in more depth.
In addition to recruitment companies, creating a strong network is crucial. Getting in touch with other contractors in your sector and going to conferences or events could help you have a better insight and find your next job.
Getting a Job
Contracting is very competitive. It requires a lot of flexibility from the specialist. Most companies will hire a contractor for a project they need to solve ASAP. Hence, the ones willing to wait for a month’s notice or longer are rare. Companies will be looking for immediately available people; some could wait for two weeks’ notice.
Once you weigh the pros and cons and have a clear idea of what you are going into, be ready to give your notice. This advice mainly targets people with a long notice period who are serious about it. Otherwise, if that sounds too risky, chat with your manager and let them know your situation. Try to negotiate (even before attending any interviews, it can help you rank higher on the list!).
Now, you can start looking at the job boards. Send your CV over directly to specialized recruitment companies. They may not have your desired role listed on their vacancies yet, but you can be the first one called when a new opportunity arises.
Umbrella vs Limited Company
Hooray!!! You got a contract! Now, you need to get paid. The question of which payroll to choose is up to you. Both offer pros and cons.
An umbrella company could be ideal if you don’t want to tackle the administration and tax side of having your own company. It also means that you are not, per se, self-employed, as the umbrella works as an employer (for a fee). You will still be considered an employee under the law and are eligible for PAYE and NI contributions.
Setting up a limited company is the most tax-efficient business operation. However, as a business owner, there will be legal requirements. If you are unsure about the process and management, get an accountant. They will help you sort this out and help you through the requirements of running your own business.
You must have a good understanding of this piece of legislation. IR35 is tax legislation directly affecting your business and how you pay yourself. Being ‘inside IR35’ means you are considered an employee for tax purposes. Therefore, you will need to pay income tax and NICs. If you are ‘outside IR35’, you are fully self-employed, and you can benefit from the tax advantages and can pay yourself a salary.
This may vary from contract to contract and from the end client, mainly if you work for the public sector. IR35 is not a consideration for those under an umbrella company as they are still “employees”.
Now, you are fully prepared to start your career as a contractor! Feel free to contact us or send your CV for further guidance.