Contracting for the government

The government takes on contractors, consultants and interim managers to work in a range of areas across the public sector from human resources to social work. In fact at SJD we currently have clients working on government contracts across the housing, urban regeneration, transport and defence sectors.

This article covers some of the common areas within the government that you could work as a contractor, as well as providing advice on finding work, rates of pay, IR35 and the most tax efficient way to contract.   

Working as a government IT contractor

With increased importance surrounding cyber security there are opportunities for IT professionals to work on a contract basis for the government sector.

The Government Digital Service (GDS) is responsible for building world leading digital public services and helping the government to make their digital platforms and online information clear and easy to use. The GDS have a range of IT opportunities from software developers to analysts, and take on contractors to work on individual fixed-term projects. The GDS specify that contractors who work with them need to have certain skills and experience, which include CSS, JavaScript, Ruby, Python and cross platform HTML. 

As an IT professional working for the government you may find that your contract stipulates that you need to have security clearance. To become security cleared you will be required to undergo a series of background checks and a vetting process, which will allow you to access sensitive or classified information. There are various levels of security clearance, which correspond to how sensitive or restricted the information you are able to handle is. It is worth noting that if you are contracting in a role that requires security clearance you could earn up to 24% more than a contractor who is not security cleared.

For more information about what security clearance is and how to get security clearance, you may find our how to become security cleared page useful. Alternatively, if you are ready to search for a contract, the Security Cleared Jobs website lists job opportunities for IT professionals who have security clearance, including some positions in the government sector.  

Contracting for local councils

It goes without saying that the mammoth task of running a town, city or region means that contracting opportunities within local authorities or councils is vast. Here, they use the specialist skills of contractors or consultants to work on individual projects across various areas, from housing to social work. 

There are many job boards that specialise in public sector and local government positions for contractors. Some of which are listed below:

  • LG Jobs – This is the official government jobs website for both contract and permanent roles available in local government and councils throughout the UK.
  • Local Gov Jobs – A job board which specialises in local government positions, including interim and contract roles.
  • Jobs Go Public – Launched in 1999, Jobs Go Public is a job site for positions in the public and not for profit sectors including local government roles.    

Contracting in defence

In 2014 The Telegraph reported that the Ministry of Defence (MoD) spent £66 million on consultants from April 2013 to January 2014, which is over double the amount they spent during the same time span in the previous year.

Whether the contract is within aviation, engineering, technology or security, when looking for a contract as a defence consultant in the MoD you may find Hays helpful. They are an international recruitment agency with a track record of placing IT professionals in positions across the defence sector.

The civil service jobs website is a government website that may be helpful if you are looking for contract roles in the MoD. This job board lists both permanent and contract positions across a range of governmental departments as well as the MoD, such as the Ministry of Justice, National Crime Agency and the Department for Transport.  

Contracting as an education consultant

Education consultants who work as independent advisors for educational institutes on a contract basis are employed by local education authorities, schools and higher education establishments. In 2015, The Conservative manifesto promised to protect the budget allocated to schools while raising standards and restoring discipline. This suggests that the ongoing demand for education consultants will continue as the United Kingdom strives to compete with education systems throughout the world.  

When looking for work as an education consultant you may find specialist job boards such as TES useful. TES lists job opportunities across the education sector from teaching positions to consultant and advisory roles; the website also posts regular industry-related news stories.

Contracting as a medical professional

From working in the armed forces to a local NHS hospital if you are an experienced doctor, nurse or other medical professional then there are opportunities for you to work on a locum basis. If you would like to find out more information you may want to visit our becoming a locum doctor or becoming an agency nurse pages.

Finding work as a government contractor

There is such a variety of contracting opportunities in the government sector that finding work will depend on your area of expertise or the area that you would like to work in. We have listed some job boards and recruitment agencies that specialise in various government sectors that may help you with your contract search.

  • Hays – An international recruitment agency, with a section dedicated to roles in the MoD including medical, IT and other non-combat contracting opportunities.
  • Guardian Jobs – A job board covering a range of contract and permanent positions across a variety of sectors. Selecting the ‘Government and Politics’ option will show both contract and permanent roles, from opportunities in local government authorities and councils through to senior civil service positions.
  • Civil Service Jobs – a job board with both permanent and contract opportunities available in a variety of areas including the Cabinet Office, Ministry of Justice and the MoD.

Rates of pay for government contractors

There are many roles within the government and so your rates of pay will depend on the area that you are contracting in as well as your experience, qualifications, skill set and of course your negotiating skills.

The Guardian reported in 2014 that the government paid some of their consultants £2,000 per day, but of course this will be for a minority. When we looked at the job market in the summer of 2015 there were government contract roles advertising daily rates of between £200 and £800.

IR35 for government contractors – are you classed as inside or outside IR35?

There is a common misconception that when working for the government you are classed as inside IR35, but regardless of whom you work for, whether you are inside or outside of IR35 is all dependent on the terms listed within your contract.

Whether you are working inside IR35 and are caught by this legislation will depend on your individual contract and so we would always recommend you have your contract reviewed by a professional. For more information on IR35 you may want to visit our IR35 Advice for Contractors page or if you would like a professional to review your contract find out about our IR35 Contract Review Service.

Once you have secured your contract and identified its IR35 status you will need to decide on the best way to operate. The way of working that is right for you will depend on a number of factors including the length of your contract, daily rate and your attitude to contracting.  

Limited company or PAYE umbrella?

The two most popular ways to operate as a contractor are through an umbrella company or by working as a director of your own Limited company and there are advantages and disadvantages to both options. Contracting under an umbrella company is ideal for those that are only contracting for a short period of time or who are earning under £25,000 annually as the umbrella company will take care of the financial side of things for you. However, this does mean that umbrella companies are the most expensive way to contract.

Many contractors decide to operate as the director of their own Limited company method as this is widely considered to be the most tax efficient way of working. Limited company ownership does come with an increased administrative responsibility, which usually amounts to 15 minutes of paperwork a month. However, SJD has 15,000 Limited company clients who have found that the extra administration work is well worth the benefits that working through a Limited company brings.

If you would like to find out more information then you may want to visit our Limited vs Umbrella and advantages and disadvantages of going Limited pages.

How to set up a Limited company?

If you have decided that Limited company ownership is the right option for you then you will be pleased to know that the process is probably far more straightforward than you are expecting. All you need to do is decide on a company name, complete a short, five minute form and then your company will usually be formed within a few working hours. You may want to use our company name checker to see if your desired name is available.

Do I need to appoint an accountant?

As a Limited company director you may decide that you would like to appoint an accountant to help you with your personal and business taxation needs and to ensure that you are working as tax efficiently as possible. You may be surprised to know that the cost of appointing an accountant is often less than the cost of an umbrella company fee.

Some contractors decide that they would like to use a local accountant, but they may not have specialist knowledge on issues that are specific to contractors such as IR35. SJD Accountancy is the UK’s largest contractor accountants and currently support their 15,000 freelancer, contractor and consultant clients with all their taxation needs. They provide an all-inclusive, fixed-fee service that includes:

  • Year-end accounts*
  • Corporation tax
  • Payroll bureau
  • Dividend administration
  • Dealing with HM Revenue and Customs and Companies House
  • Quarterly VAT calculations
  • Support with Annual Returns
  • Unlimited access to your own dedicated accountant

If you have any questions about how to contract for the government or if you would like any further advice please call 0500 152500/01442 275789 or email: jessica@sjdaccountancy.com

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 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's Largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant face to face.
  • Money back service guarantee. All your Emails received by 4pm on any normal working day will be answered the same day. Should it be necessary to leave a telephone message it will be answered same day/following day latest or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee starting from £120 plus VAT per month. Check our packages for more detail.

If you have any questions about contracting or would like any further advice please call our new client services helpdesk on 01442 275789 or email: janice@sjdaccountancy.com. Our new client services helpdesk is open Monday to Friday (8am to 6pm).

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

Form your own Limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.