Making the transition into the world of contracting can be a pivotal moment in your career. Whether you are an experienced professional seeking more autonomy or a recent graduate exploring different job paths, understanding the ins and outs of contract work is crucial.

What is a contract job?

Contract jobs, also known as contingency or temporary work, are essentially short-term employment agreements between a contractor and a client. Unlike permanent positions, which offer long-term job security, contract roles come with various predetermined durations. The compensation structure usually involves hourly rates or fixed fees for specific tasks or projects.

Contractors are essentially independent workers. This independence means you have greater control over your schedule, work environment, and career trajectory. However, it also requires careful financial planning and the ability to adapt to the fluctuating nature of contract work.

What is the easiest way to find contract jobs?

Specialised Recruitment Agencies: Many agencies specialise in placing contractors in various industries. They have the expertise to match your skills with available contract positions, saving you time and effort.

Online Job Platforms: Platforms such as LinkedIn are excellent starting points for finding contract work. Creating a comprehensive profile highlighting your skills and experience is essential to attract potential clients.

Networking: Building and nurturing a professional network is invaluable in the world of contracting. Attend industry events, join relevant LinkedIn groups, and inform your colleagues that you are open to contract work. Personal connections can lead to fantastic opportunities.

Do I need to set up my own Limited Company?

There are two popular business models for contractors – setting up a limited company or operating under an umbrella company. Both have advantages and disadvantages, and deciding which direction is right for you is a key consideration of contracting.

Becoming a director and shareholder of your own limited company is the most tax-efficient way of contracting as it allows you to have complete control over your financial affairs. However, operating a limited company does involve legal obligations and paperwork requirements, so it is important that you understand these aspects thoroughly to ensure your business operates within boundaries of the law.

Alternatively, you may choose to operate under an umbrella company. They will take this responsibility off your shoulders by sorting the invoicing, paperwork, and collection of money on your behalf.

However, it is worth mentioning that with the umbrella company model, you do effectively become an employee again, and are therefore eligible for PAYE and national insurance contributions.

Getting to grips with IR35

IR35 is a piece of tax legislation which affects contractors directly. Its primary objective is to prevent contractors working as disguised employees by taxing them at a rate comparable to that of traditional employment.

The legislation affects all contractors who do not meet HMRC’s definition of self-employment. If you are working as a contractor but have the same, responsibilities, control, and benefits as a permanent employee, you must declare yourself inside IR35 as you are not entitled to a different tax regime.

If you declare that you are working outside IR35 but HMRC deems this to be false, you could face a large tax bill and penalty. Hence, if you declare that you are operating outside IR35, it is crucial to confirm that both your contract and your working practices demonstrate your status as an independent contractor.

What are the benefits of contract jobs?

Flexibility: One of the primary draws of contract work is the unparalleled flexibility it offers. You have the freedom to choose the projects that align with your interests and skills, set your schedule, and even work remotely. This flexibility can lead to a better work-life balance, which is increasingly important in today's fast-paced environment.

Variety: As a contractor, you will likely work on a variety of projects and collaborate with different clients and teams. This diverse experience not only keeps your work exciting, but also enhances your skill set to broaden your professional network.

Higher Earnings: Contractors often enjoy higher hourly rates or project fees compared to their permanent counterparts. While this comes with added responsibilities, the potential for increased income can be substantial.

Independence: Contracting offers a level of professional independence that is hard to find in traditional employment. You have the autonomy to shape your career path, explore new opportunities, and take charge of your success.

In conclusion

Starting a career as a contractor can be a rewarding and liberating choice. The flexibility, variety, and professional independence it offers are enticing advantages. If you are ready to embrace the challenges and rewards of contract work, start building your online presence, networking within your industry, and exploring contract job opportunities. Your journey into the world of contracting awaits!

Here at Blueprint Recruitment, we specialise in supplying contract, permanent and temporary resources for projects throughout the UK and internationally. If you are thinking of switching up from your permanent position or fancy a new contract challenge, why not head over to our Sectors tab to explore our current opportunities!