So you are keen to leave your PAYE job and become an IT contractor, or you have built up some IT skills and contacts, so Contracting seems the best option to start off your career.
Here are a few things you may want to consider for your IT contractor role.
Sourcing and Winning Contracts
In employment IT roles you may not be used to being a sales person and networking online and offline to win work. When contracting you become a Product and Service that your client needs. You must, therefore, show your unique skills (worth noting however that there are contracting positions available at all levels of expertise). It’s important to look professional so getting some slick business cards printed, having a good website, and providing good tendering documents can make you stand out above the rest.
Know your Worth
When contracting and deciding your day rate/ hourly rate you can usually find out online the market average for your specialised sector. It’s important to know your worth and charge accordingly depending on your level of expertise, as well as taking into consideration travel and subsistence for contract work that is further away than your usual location. Make sure you have a professional contract in place to ensure that payment terms are met.
Working with Agencies
There are many UK Recruitment Agencies who work specifically in sourcing Contracts, as opposed to PAYE positions. When tendering for contract work you will likely go through a similar process as you would when being interviewed for a staff Position. Your client will be looking for the usual indicators of whether you are right for the position, therefore it’s important to appear presentable, likeable, professional and display your key skills – the only difference being that you will be providing a service to this client (and therefore want to display great customer service skills) as opposed to this person being your boss.
Sole Trader or Limited Company
Which suits your requirements best?
This depends on factors such as the amount of revenue you think you will make in the year, along with the length of your contract/contracts. Speak to a qualified Contractor Specialist Accountant to ensure you are working in the correct trading method to best suit you.
We have lots of blogs on the topics of IR35, and can provide you with a free downloadable guide and you can take our Business Entity Test here, but at the end of the day, it is essential to make sure your contract is IR35 compliant; by having this checked by an expert (we offer a free annual contract review as part of our fully inclusive service).
You must also ensure that you are following this contract with compliant Working Practices, to ensure you are not behaving as a ‘Disguised Employee’ – remember you are not a member of staff, you are a service provider to your client, and should act and work accordingly.
Find Contractor Accountant & Find Insurance
Yesterday we posted a blog on what to look for in a Contractor Accountant, we recommend that you opt for a specialist in this field as they can offer you the extra guidance on specific legislation which relates to Contractors (such as IR35) and will ensure that you are up to date with everything you need to do as a Contractor, whether you are a Sole Trader or Limited Company.
A good Contractor specialist Accountant will make you aware of the Insurance cover you will require and put in touch with a specialist Insurance provider.
At the end of the day, you are your own boss, and you should decide and plan your own holidays. This is a good opportunity for you to exercise your ‘Right to Substitution’ – in which you can utilise your contacts with another IT contractor to cover you while you sun yourself somewhere fancy. This will put you in a great position for IR35 compliance.
It makes sense to take holidays in between contracts and not at the beginning of a new contract as this could lower the likelihood of the client taking you on for the job.
Great resources to help you:
Contract Eye – a leading news site for contractors, consultants and freelancers. Great for guides on IT contracting specifically.
PCG – the voice of freelancing. Keeping you up to date with everything happening in the world of being Self Employed. Really good for contractor news and their magazine Freelancing Matters is also brilliant for keeping up to date with everything.
Contractor UK – been going since 1999 (the same as us!) and have a UK IT contracting community, offering help to find contracts, more brilliant guides, and an active forum.
FreeAgent – a really good online book keeping software, that I would recommend for Sole Traders who want to be hands on. You can make your money back by referring friends (so you both save money).
Contractor Calculator – lots of great guides on how to wow your potential client when tendering for work, great calculators to figure out how much extra take home pay you will take home, and lot’s of other resources.
Contractor Mortgages made easy – if you are having trouble sourcing a mortgage now that you have ‘gone contract’.
Company Bug – heaps of information on starting up a Limited Company and what’s involved.
ITContracting – objective guides for prospective as well as veteran contractors.
FW Accounting. You Count. We Count.
Self Assessment – Q & A
Self-assessments. We have all heard of them, you maybe even know what they are. However, here at QAccounting some of our most frequently asked questions are about self-assessments. So below we have outline some of the most common questions we get asked, and the answers we get so tired of giving… just kidding.
Setting Up a Limited Company – 5 Key Things to Consider
If you are looking at going self-employed, then setting up as a Limited Company (LTD) may be the best option for you.
The Benefits of Having an Online Accountant
Here at QAccounting we are part of one of the UK’s largest contractor service providers. We started operating over a decade ago (around the same time DFS started their first sale) and have been dedicated to serving self-employed professionals ever since. One of the perks of choosing and accountant like QAccounting is that we offer all of our accounting services online.