Becoming a Contractor

Becoming a Contractor

Moving from Permanent to Contractor can be quite scary; however it is becoming a more popular route.

For some the switch to contracting is choice however for others it is necessity due to the decline in
fulltime permanent roles, SJD Accountancy the UK’s largest accountants to contractors who support
over 10,000limited company contractors reported a 70 increase last year in the number choosing to go
contracting and forming their own limited company.

Of course moving into contracting can be financially rewarding with regards to take home pay, and
mentally stimulating in terms of job satisfaction and overall control. However, the transition into the
world of contracting isn’t without its own challenges.

For example permanent employees will have to make some sacrificed especially those from large PLC’s
or government organisations such as: pension, life assurance, mobile telephone, 25+ days ‘paid’ holiday
and the odd Christmas party. However, the most permanent vacancies do come with their fair share of
office politics, poor promotion opportunities, manager worries along with the content problem of job
cuts and redundancies.

Working as a contractor does have numerous advantages such as more often than not a hire daily rate
than that of the equivalent employee, greater flexibility, increased freedom, wider skill development
and an opportunity to be seen in a different light by a potential future employer, that is if you ever
wanted to go back to the world of permanent employment. An arguably many contracts last just as long
as permanent roles.

To help with the move to contracting please find below a few hints, tips and advice:

How to find a contract?

Recruiters and job boards
It’s the obvious choice for most contractors, recruiters can be extremely useful in finding you instant
work. Some useful websites include technojobs.com, itcontractjobs.co.uk however you’ll find if you
Google the type of work you’re looking for, a large list of recruiters should appear.

Networking
Networking is a crucial aspect of developing leads and contacts – the more people who know, the more
likely you are to generate business. Get to know as many people as you can, contractors are often asked
if they know other contractors who could help on a specific project.

Get signed up on LinkedIn and start contacting people/groups who might be able to help you promote
your services.

What’s best limited or Umbrella Company

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You'll typically take home around 75% - 80% of your contract by working through your own limited
company. Through an umbrella company you'll typically take home around 60% - 65% of your contract.
However, this doesn’t mean everybody should go limited.

Limited Company: The most tax efficient way of working; claim a wider range of expenses; access to the
Flat Rate VAT scheme; you keep complete control of your financial affairs; running your own business
isn't difficult with the help of a good accountant; greater opportunity for tax planning. However there is
a certain amount of paperwork involved, usually about 10 - 15 minutes per month; not ideal for
contracts less than £25k per year and you have to be comfortable with making business decisions.
Umbrella company: you’ll receive a salary that is subject to full PAYE Tax and NI, it's just like being a
permanent member of staff again; good if you are unsure if contracting is for you and you're likely to
contract for less than three months; ideal for contracts less than £25k per year. However, it is the most
expensive way tax wise of operating; you are reliant on the umbrella company to collect your money
from the client or agent and then to pay it on to you.
Steps to contracting and going limited

1. Form a Limited Company. This will take 5 minutes and your company should be set up within
two hours. The cost of formation is £125 plus VAT which includes VAT registration and setting
up a business bank account.

2. Appoint an accountant

3. Invoice your client/agency (we provide you with a template). Complete a very simple Excel
spreadsheet, similar to an expense claim form which should take about 15 - 20 minutes per
month to complete. Forward any correspondence you get from the Revenue or Companies
House to your account manager at SJD and we will take care of it for you.

If you have any queries or would like further advice please don't hesitate to contact us on 0500 152500 /
01442 275789 or email michelle.turbutt@sjdaccountancy.com

http://www.sjdgroup.co.uk/press/becoming-a-contractor/

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, limited company accountancy
services to contractors; we've been acting for contractors across the UK since 1992 and have more than
10,000 clients.

We are the only National specialist firm of accountants with offices in all major UK cities so you’ll never
be far from your accountant. SJD also have more qualified staff than any other firm in our market with

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qualifications from the following major tax and accountancy bodies - ATII, ATT, ACCA, CA, ACA, FCCA,
ACMA. You’ll also be pleased to know that we are one of the lowest priced as well.

SJD have also won every relevant industry award possible, including:

'Best Contractor Accountant' - Winner ContractorUK readers award 2010, 2009, 2008, 2007 & 2006
'Small Firm of the Year' - Winner Accountancy Age 2007
'100 Best Companies to Work For' Award - Sunday Times 2007
'AXA Business of the Year' - Finalists National Business Awards 2007
‘Excellence in Customer Service’ and ‘Business of the Year’ – Finalists Chamber Awards 2008
'Outstanding Two Star Status' - Best Companies Accreditation 2006
'Accountancy Age Award for Excellence' Winner 2004
Winners of the "Sunday Times Best Small Companies to Work For in the UK" Award, achieving the
highest position ever for a firm of accountants.
We offer all clients:

Free face-to-face meetings. This is another unique service, only SJD offers free face to face meetings -
tax is complicated and sometimes only a meeting will do.
Unlimited access to your own dedicated accountant. No call centres, no outsourcing, no automated call
handling. Simply telephone, e-mail or meet your own dedicated accountant face to face.
Money backed service guarantee. All your telephone calls and e-mails will be answered the same day or
we will refund your monthly fee's.
Outstanding reputation. We have won more awards for customer service and accountancy excellence
than any other firm in our market.
All inclusive low cost monthly package which includes completion of accounts, payroll bureau, dividends
and corporation tax computations, personal taxation, free bookkeeping software, unlimited access to
your accountant and all company returns.

All this for a fixed monthly fee of £105 plus VAT, which is one of the lowest prices in the market. And
most importantly, in a recent survey 98% of our clients rated SJD as 'better than other accountants' - we
are working hard to convince the other 2%!

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