Right now, is a fantastic time to become a contractor, particularly if you work in the IT and tech sector.
Contractors with specialist skills in data science, cybersecurity, frontend developers and change managers are especially in high demand. And, our research shows that contractors in the IT sector are amongst some of the highest paid contractors.
If you feel you’ve got the necessary skills and determination to make it as a contractor, you can look forward to earning more than you did as an employee, being able to choose the type of contracts you work on and having the freedom to work when you need or want to.
The first year of working as a contractor is always the hardest. To help you navigate through this sometimes confusing and difficult time, here are somethings you need to consider as an independent contractor working through your own limited company:
Find out what it’s like beforehand
The only way to understand what it’s like to work as a contractor is to speak to other contractors. You may have colleagues who are contractors who you can ask. If not, ask friends or family members if they can put you in touch with some. Alternatively, ask for opinions on sites like LinkedIn or on contractor forums.
It’s a good idea to get insider opinions first, before making the leap, as contracting is not for everyone.
Send your CV out to agencies
On deciding that you want to be a contractor, one of the first things to do is to update your CV to reflect your current skills and experience. You can either do it yourself (see our article CV advice for contractors) or hire a professional CV writer to do it for you.
Once your CV is ready, send it out to all the agencies who recruit contractors for your sector. LinkedIn is the ideal place to connect with recruiters and to search for contracting roles.
Also, job boards like Indeed, Reed and specialist sites like ITjobswatch or CWjobs are a good place to find the details of contractor recruiters.
Get an accountant early on
Most contractors engage with a contractor accountant early on in their contracting career, to advise and assist with setting up a limited company. In addition to this, the accountant may be able handle a number of directorial responsibilities such as:
· Preparation and filing of annual accounts to Companies House and HMRC
· Calculating any Corporation Tax liability and filing form CT600 to HMRC
· Advising on VAT & Making Tax Digital
· Offering guidance on IR35, amongst other things.
Save for the lean times
One of the few downsides of contracting is that there will be times between contracts when you are not working. It’s estimated that for every 12 months you spend contracting, three months will be spent not working.
As well as putting a portion of income aside for tax etc. set aside an amount to cover your outgoings during these lean times.
With 20-plus years of experience working with contractors, our team is on-hand to answer any questions you have around contracting. This includes setting up and running a limited company, how to work as tax efficiently as possible and whether or not you need to be VAT registered, plus many more things.