Are you looking to be your own boss? Do you enjoy being in control of your time and deciding which projects are worth working on? If so, contracting might be the option!
With our quick Guide To Contract Work In The UK, we give 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 is appealing 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. What attracts a lot of people in addition to the diversity of work, is the potential earning. 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 in terms of location and start date. You might get a new job and be asked to start within the week or even the next day. Furthermore, it may involve a lot of traveling, depending on your region. You have to be ready to live out of the 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 impact them as well.The major issues that you may encounter will be the fluctuation of work 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 director of your company, you won’t get any pension, paid holidays nor sick days.
Check the Demand!
So far so good, you have read the above paragraph and you 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 or technology.Being specialized in some of the latest technologies will be able to offer you a higher rate and more opportunities as the demand is growing, like for DevOps, Big Data or AI/ML.
On the contrary, if you are specialized in an outdated technology, it can be fairly challenging to get frequent contracts and at your preferred rate.To understand better your market value, you can contact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 areas such as IT and Data Analytics. 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, rare are the ones willing to wait for a month notice or longer. Companies will be looking for people who are immediately available, some could wait for two weeks notice.
Once you weigh up the pros and cons and have a clear idea in what you are going into, be ready to give your notice. This advice is mainly targeting people under a long notice period and who are serious about it. Otherwise, if that sounds too risky, have a chat with your manager and let them know your situation. Try to negotiate (even before attending any interviews, it can help you rank higher in 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, 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 as an employee under the law and are eligible for PAYE and NI contribution.
Setting up a limited company is the most tax-efficient way of operating your business. However, as a business owner, there will be legal requirements to handle. If you are unsure about the process and management, get an accountant. They will be there to help you to sort this out and help you through the requirements of running your own business.
It is important that you have a good understanding of this piece of legislation. IR35 is tax legislation that will affect directly your business and how you pay yourself. Being ‘inside IR35’ means that you are considered as 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 are able to pay yourself a salary.
This may vary from contract to contract and from the end-client, mainly if you are working 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 over for any further guidance.