Life as a contractor can be extremely rewarding once you’re in the full swing of the job. But getting there requires several steps before you can fully reap the rewards of contracting. It’s vital that you fully prepare for being a contractor before jumping in or you risk having to fix a mistake at a later point.
Luckily this 6-step guide provided by Brookson will help you begin the contracting life in the correct way, ensuring you fill out vital paperwork and research everything you need to know.
The first step is one of the most important, to research contracting within your chosen industry. Whether you’re looking to become an IT Consultant or an Engineering contractor, you need to research the industry and the market you’ll be entering.
Find out whether the market is open to your skillset as if it’s already flooded with competition then it’ll be that much harder to start. With a lot of the contracting business, past clients and contacts is a huge part of your income.
While researching ensure to find out what contract rate you’ll be able to command for your services. This gives you an idea of what kind of income you’ll be able to walk away with after each job and better sets you up for the year ahead.
Is It for You?
While you research, try to consider if contracting is the life for you. As being a self-starter and taking the plunge, it comes with a degree of risk as you leave your full-time employment for greener pastures. Just with the advantages of contracting, you’re leaving the comforts of a traditional job that provides additional perks and a consistent paycheck.
Don’t be put off though, as a contractor you’ll have the chance to double or triple your income all while having far more control over your life than a traditional job. You’ll enjoy a wide range of different working environments and keeps the job fresh for far longer than other jobs.
Get Your CV Ready
Applying for contract roles means you must get your CV up-to-date that properly shows off your skills and experiences to the client. These are your main selling points and should be at the top of your CV and effectively focused on.
Remember to be concise and try to trim any unnecessary fluff from previous jobs that aren’t relevant to your chosen industry.
These are simple points but are relevant every time you’re applying for a contracting job, this is the first time the client will see you and your skillset, so make sure it’s a good view.
Now more than ever your online presence has a huge effect on your contracting career and it’s vital you get ahead of the curve. This means treating your online social presence as part of your CV as potential clients will use these avenues to enquire into your skills and experiences.
Creating a LinkedIn account if you don’t already have one is an excellent way to create a business presence and sell yourself. As a business focused social network you can use it to search for past clients you’ve worked with and build up a network of connections you can rely on to ensure your work is less likely to slow down.
Limited or Umbrella?
It’s a good idea to work via a Limited or Umbrella company regardless of what kind of industry you’re contracting in. It’s considered unusual and rare for a contractor to work as a sole trader as the client will be liable for certain employment rights that you miss out on via a company structure.
Most contractors work via their own companies as it’s much easier and more efficient when it comes to tax. Working under your own company structure means you have more administrative duties, which can be quite overwhelming for people that aren’t prepared for it. That’s why it’s advised you to speak to a specialist accountant that can carry out most of these duties on your behalf. With years of experience and expert staff on hand, you’ll have the help you need to focus on contracting and none of the administrative paperwork.
IR35 is a law in place that attempts to clamp down on the practice of ‘disguising employment’ where an employee would leave, form their own limited company and return. Doing the same work but also receiving all the benefits of a contractor for themselves and their employer.
IR35 only applies to limited company contractors, so make sure you don’t fall into the IR35 trap and end up paying the price. There’s significant financial consequences and the tax benefits of a limited company will disappear.
It’s best to read up all you can on IR35 but to make sure you’re fine, speak to a specialist contractor accountant who will be able to assist you. They’ll be very familiar with the law and will be able to advise you to ensure that you’re free to work without worry.