how to become a contractor.

Entering the contracting world can be a daunting time and getting clear unbiased advice can be challenging.

That is why we have put together out top tips on becoming a contractor, our guide will explain all the necessary steps you need to take. 

What is contracting and how do I get into it?

Contracting is when a worker is hired for a fixed amount of time and is usually added to the company payroll. 

As a contractor you'd be either self-employed or an employee that works for a client and are employed by an agency. Contracts mostly arise when companies have projects or during especially busy times.

Confused if you should contract, or go permanent? Read our article below comparing all types of employment.

contracting vs permanent vs temporary work.


Research, research, research.

Doing your research is the first and most important step and before you begin a contract you should be able to answer the following questions:

  • is contracting right for me and my current circumstances?
  • are there many contractor jobs available in your field of expertise?
  • can you make enough money from contracting?

Contracting can seem intimidating but it offers many benefits such as increased earning potential, flexible working hours, job autonomy and tax benefits.

Write the best CV.

Your CV is most likely going to be the first impression you get to make on a potential employer. Therefore it is essential that is reflects you and your skills as best possible. To find out how to write an award winning CV click on the article below.

how to write a great CV.

Find contract jobs.

The contracting industry is populated with many recruitment companies, some specialising in specific sectors and many a broad approach. 

This is a great place to start and the easiest route to put yourself on the market.

You also have the option of finding contract roles directly through end clients. This can be difficult for someone who is new to the contracting world as it is all about who you know. You will be relying a lot on the network you have around you.

 Keeping in contact with friends, family, previous and current colleagues can help expand your reach. Make sure you update your LinkedIn profile and put your CV on contractor job sites, this will again show your career path.

Limited or umbrella -  which one do I choose?

Confused whether you should go limited or umbrella? Don’t worry this is common! Both umbrella companies and you own limited company have pros and cons, but which is the best for depends on your unique situation. 

Below are the advantages and disadvantages of each.

Limited company.


  • the most tax effective way of working
  • claim a wider range of expenses.
  • access to the Flat Rate VAT Scheme
  • you keep complete control over your financial affairs.
  • greater opportunity for tax planning.


  • you will have to complete your own paperwork
  • can be costly if you contract for short period of time then return to permanent employment
  • not ideal for contracts less than £25,000 per year.

PAYE umbrella.


  • easy to use -simply enter your time sheet and expense details and wait to be paid.
  • all tax and NI is deducted before you receive your money, so you will have no further taxes to pay.
  • ideal for short-term contracts
  • idea; for contracts less than £25k per year.
  • someone else will be doing paperwork


  • the more expensive way of working - you will receive a salary that is subject to full PAYE Tax and NI
  • you are reliant on the umbrella company to collect your money from the client or agent and use it to pay you
  • you have no control over your contracting finances (for examples, dividends)

Are you inside or outside IR35?

Once you secure your first contract and set up your preferred payroll service, you are almost ready to start contracting. 
But first there’s one more thing you need to consider and that is whether your contract puts you inside or outside of IR35 - government legislation that helps determine whether a contractor is genuinely self-employed).

Find out your tax status for the IR35 legislation, or to get help with negotiating the terms of your contract, you should connect with a tax status specialist.

The recruitment agency will liaise between you and the client to finalise and sign your contract so you can get into you new job. 
Make sure you complete all timesheets, expenses and mileage to your accountancy service provider when requested.

Search our contract jobs

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