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The world of contracting can sometimes feel over-whelming. Our resources here help explain what contracting is all about, and if you still have some questions or feel a bit unsure send us a quick message, or get in touch.

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The contracting world

In the UK, contracting is a popular way for businesses to engage a temporary workforce for either short term projects, or for adding to an existing resource pool for extra firepower, knowledge, expertise, or simply just to get another pair of hands on board.

Most contractors get their assignments from recruitment firms, though they can also source work from existing contacts they might have within the industry they work. Most recruitment firms advertise roles on their own website, and on the huge array of online job boards. Contracting is great for getting exposure to different companies and seeing how they work, and contract roles are usually higher paid than full-time employee roles. On the downside job security is less certain and you may go weeks or months between contracts. Holidays go unpaid, as do sick days – so it’s a matter of assessing what’s important to you and whether it fits into your lifestyle.

How to do it

After you have attended interviews and finally landed that dream contract, you then need to decide which structure you would like to operate through. In general there are two options; either use a PAYE Umbrella service, or your own Ltd Company. The third option is using some form of offshore structure though there are inherent risks with these that aren’t always obvious, and we would never recommend you walk this road.

PAYE Umbrella

Great, so you’ve decided to use a fine Umbrella service such as ours. After you sign up for our service we will gather all your details, prepare an employment contract for you, and get all your work details from your recruitment firm. This is completed fully online and and super easy for you and your agency. You will be become our employee, and then head to work on behalf of our company at the end clients premises. Along the way we’ll send you our expenses guide so you get a good idea of what sorts of expenses you can claim by using our service, though from 06 April 2016 the use of claiming expenses to reduce your taxable income has ceased. Valid expenses help to reduce the overall PAYE tax you pay, and are claimed at the end of each year through your personal tax return. At the end of your first week at work, you will prepare a timesheet on our system, and we will prepare an Invoice and send it off to your recruitment firm (we’ll text you when we do this, so you know we’re now chasing payment for you). Once we have collected payment on that Invoice (usually the following week), we will prepare to run your payroll. This involves calculating all PAYE/NIC taxes due, and making a net payment into your personal bank account (which we’ll also confirm with you by text message). Your payslip will be available to view online (see our sample payslip here), and you can keep track of what timesheets have been paid. That's it!

There is normally no requirement for you to file a UK tax return, unless you have other forms of income that require it, or you want to reclaim back some Expenses. And we look after paying all your PAYE and NIC taxes. It really is the simplest form of contracting.

Ltd Company

Contacting through your own limited company involves a higher element of administration and effort, however the net pay benefits can often make this an attractive option. For more information take a look at our No Worries limited company service for contractors.