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Becoming an IT Contractor

IT Contracting

Starting out as an IT contractor can be daunting, particularly if you are moving straight from permanent employment. The extra work required can seem overwhelming; so where do you start?

Firstly you must market yourself, then find and negotiate contracts, look after your tax and annual returns – and, of course, do the work you are contracted to do. However, your new life as a contractor may not be as difficult as you presumed. Getting yourself organised from the outset can help ensure that. So rather than flailing around in a tangle of paperwork, trying to sort out a business plan, why not let an umbrella company remove those additional worries.

On the simplest level, an umbrella company is a means of outsourcing your payroll requirements, rather than being paid directly by your client, the umbrella company will process your payments, from timesheets submitted by yourself. With an umbrella company you will pay both employees and employers NI (Employers NI is 13.8% of your salary, and employees NI 12% for the first £770 a week, and 1% thereafter (both after tax free personal allowances). Your income will be treated as if it were a conventional salary.

UK IT consultants are highly sought after all over the world. Online business marketplace reported a 275% increase in the number of US firms hiring UK IT consultants over the last year.

So where do you start?

  • Look at Job Adverts
    Look at both permanent and contract work, who knows a company may wish to consider a contractor in the interim? Send your cv out to companies and if possible try to get in to visit them.
  • Be realistic about your capacity to earn
    It may not be possible to move from one contract straight into another one, so be prepared.
  • Choose how you want to manage your finances
    Look at the options available to you, between umbrella companies or setting up your own limited company. You can read more by clicking here to view our guide on Umbrella vs. Limited.
  • Don’t forget to save
    Build up some spare cash for a rainy day, this should also give you the confidence to hold out for the day rate you are worth.
  • Network and market yourself
    Most people starting out on their own do so because they have been offered a contract position, but you must ensure you are actively marketing yourself whilst working. Network with other contractors, market yourself online and build contacts. For more information, visit our Careers Section.

If you would like some guidance on working under an umbrella company, then please call us on 01206 713 680, email us at or simply complete the form below and someone will come back to you shortly.