Employment Status

Are you a contractor? If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.

Your employment status will determine the charge to tax on income from your employment or self-employment. It will also determine the class of NICs, which are to be paid.

Umbrella Companies employ you for tax purposes and complete central returns for all their contractors. It's less hassle and more flexible for you but take home pay is typically less than that the limited company option.

The best option for you depends on your plans, 'one off' contract or 'contractor for life'? [Read More...]

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Become a Contractor Start Freelancing

So You Want to be a Freelance Contractor

Any individual can go about becoming a contractor. You may be in full time employment or just starting out and wondering how your skills can earn you a decent income.

Either way you want to explore what life as a contractor means and how best to go about it.

Start By...

First off, being a freelance contractor is quite different from a permanent member of staff at a company. A contractor will have a series of temporary jobs rather than one full time permanent position. Each of the jobs will be for a

  1. Specific period (eg six months)
  2. Specified amount (usually defined in terms of an hourly or daily rate)
  3. Specific task or role to complete

The contractor is in effect selling their skills, knowledge and aptitude on a per job basis. The more unique your skills are the higher the rate you can command. The better you perform the more likely it is that you can increase your rate on future jobs.


A 'good' contractor is hard to define. A contractor is, after all, a person and we all know each one of us is unique! But certain traits are identifiable and the more of these qualities you have the more likely it is you will succeed at contracting.

Can you say 'Yes' to one or more of these characteristics:

  • You get on with strangers and like meeting new people.
  • You understand and can fulfil specific functions within a wider corporate strategy.
  • You can cope with working at different sites on a regular basis.
  • You can adapt to different cultures and work ethics.
  • You can impart your knowledge to other people and businesses in a manner which others can understand.
  • You have the maturity to know when to contribute and when to stay silent.
  • You can perform your job without constant supervision from the client.
  • You can identify and recommend further work which the client may have overlooked resulting in a win-win solution for you both.
  • You can ensure your client will always know what you have done so far, and what work is still outstanding.
  • You complete your job on time, satisfactorily and within any specified budgets.
  • You can report back to the client, at any stage of the job, in clear simple terms.

The more items you can tick the sooner you will build your reputation and the more in demand you will become. Once a good contractor is identified a client will do their best to retain their services. You may find your contract is extended or at the very least you will be kept on record for any new jobs that arise in the future.

What to do Next

If contracting is still something you'd like to do and you think you can succeed your next step should be to identify and contact two or three specialist recruitment agencies who cover your skills.

Ask the recruitment agent(s) how in demand your skills are, and get an idea of the demand from clients you can expect. Ask them if they have any current assignments that would suit you and, in general terms, how much you could earn.

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HMRC Compliance

It's the basics... Compliance with Tax, VAT, PAYE and fiscal arrangements is mandatory for contractors regardless of whether you use an umbrella company or your own limited company.

Incredible then that there are still rogue umbrella companies and limited company accountants who expose their contractors to fraud. Umbrella Compare provides THE solution, we thoroughly vet all umbrella companies and limited company accountants that we list [Read more...].

Umbrella Compare provides a holistic overview of contracting with the aim of helping new and old contractors find the right payroll solutions. Contracting should be about focusing on the contract, not payroll, accounting, HMRC and bureaucracy.